Datasea Inc. (NASDAQ: DTSS), a Nevada-based digital technology company, has announced its subsidiary, Heilongjiang Xunrui Technology Co., Ltd., has been chosen by China Mobile (NYSE:CHL) Internet Co., Ltd., a subsidiary of China Mobile, to join its Partner Database.
This inclusion, effective from July 17, 2024, potentially paves the way for Xunrui Technology to undertake specific 5G-AI communication projects, which may contribute to Datasea’s future revenue growth.
The announcement indicated that the selection process emphasized companies with strong project and platform integration capabilities, as well as rapid development and delivery skills. Xunrui Technology, with its expertise in 5G-AI multimodal communication technology, met these criteria, demonstrating the potential to enhance China Mobile Internet’s CHBN (Customer, Home, Business, and New markets) innovative products.
Liu Zhixin, CEO of Datasea, expressed that this opportunity marks a significant milestone for the company, showcasing its technological advancements and market expansion. It could also allow Xunrui Technology to expand its market channels and enhance its brand influence.
China Mobile Internet’s head of the CHBN project, Mr. Li, recognized Datasea’s capabilities in 5G communication and the internet, particularly its AI-based 5G multimodal platform, which aligns with their goal to innovate in the communication and internet sector.
Datasea Inc. specializes in high-tech intelligent acoustics in the U.S. and 5G-AI multimodal communication technology in China. The company focuses on leveraging its advanced R&D technology to provide innovative solutions across its business segments. In July 2023, Datasea expanded its global presence by establishing Datasea Acoustics LLC in Delaware.
Datasea recently registered direct offering of its common stock, expected to yield approximately $2.25 million. The offering, facilitated by EF Hutton LLC, will fund research and development initiatives, market expansion, and other corporate purposes. This aligns with Datasea's efforts to enhance its product offerings in intelligent acoustics and 5G multimodal communication.
In parallel, Datasea secured three new sales agreements through its Chinese subsidiaries, valued at roughly $61.7 million. These contracts, two in the 5G-AI communications segment and one for high-tech acoustic products, are projected to significantly boost the company's revenue growth for fiscal year 2025.
Datasea also entered into a partnership with iPower Inc. to bolster product distribution in the US online market, leveraging both companies' respective strengths. Additionally, Datasea's CEO, Zhixin Liu, plans to acquire up to $3 million of the company's common stock over the next 12 months, following regulatory compliance and market conditions.
InvestingPro Insights
As Datasea Inc. (NASDAQ:DTSS) secures a place in China Mobile Internet’s Partner Database, a look at the company's financial health and market performance provides a fuller picture of its current standing. Datasea's market capitalization stands at a modest $8.18M, reflecting the scale of the company within the technology sector. Despite an impressive revenue growth of over 2500% in the last twelve months as of Q3 2024, the company's gross profit margin remains low at 1.59%, suggesting that while top-line revenue is increasing, profitability remains a challenge.
Investors should note that Datasea's stock has experienced significant price volatility, with a 14.9% decline in the past week and a staggering 70.87% drop over the past three months. This volatility is indicative of the market's uncertainty regarding the company's future performance, despite the potential new revenue streams from the partnership with China Mobile Internet.
An InvestingPro Tip highlights that Datasea's stock is currently in oversold territory according to the RSI, which could suggest a potential rebound if market sentiment shifts. However, investors should be aware that the company is quickly burning through cash, which could impact its ability to capitalize on new opportunities such as the 5G-AI projects with China Mobile Internet.
For those considering an investment in Datasea, there are 14 additional InvestingPro Tips available that provide deeper insights into the company's financial health and stock performance. These tips can be accessed through the InvestingPro platform for Datasea at https://www.investing.com/pro/DTSS, offering valuable guidance for making informed investment decisions.
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