Leading Chinese tech firm iFlytek Co. Ltd said Thursday that its operating revenues surged in the first half of 2017, but net profits dropped following its expansion in the artificial intelligence (AI) sector.
The voice recognition and cloud service provider said in a statement to the Shenzhen Stock Exchange that its operating revenues for the first half surged 43.79 percent year on year to over 2.1 billion yuan (about 315 million U.S. dollars).
The company's gross margin reached 1.03 billion yuan, a rise of 46.99 percent year on year. However, its net profits slumped 58.11 percent year on year in the six-month period to 107.28 million yuan, it said.
The company attributed the significant profit decline to increased investment in technological research and development and a rapid expansion of its sales and service network nationwide.
Investment in AI technology rose 63.75 percent to 139 million yuan in the reporting period, according to iFlytek.
The company said its development in the first half was "healthy," citing the rapid growth in business revenue, gross margins and the number of users.
The continued investment into the AI sector has laid a solid foundation for the company to maintain a leading position in the AI era and ensured sustained development for the long run, said iFlytek.
Shares of the company were down 0.46 percent to 48 yuan at Thursday's close.