HANS CNC's stock plummeted 5.56% during Thursday's intraday trading session, extending recent declines despite the company reporting strong first-quarter earnings growth.

The sharp decline comes as investors focus on deteriorating financial metrics, including operating cash flow that turned sharply negative to RMB -6.46 billion, representing a 92.5% year-over-year decline. This cash flow strain was primarily driven by elevated inventory buildup, tax payments, and talent acquisition costs. Additionally, gross margin declined sequentially from 42.2% to 33.1% as AI-related revenue contribution decreased from the previous quarter.

Adding to the bearish sentiment was CICC's sale of 480,000 H-shares on April 16 at approximately HK$130.60 per share. While Citi maintained a Buy rating with a HK$160 target price, citing management's expectation that AI product revenue contribution will reach 50%-60% by year-end with margin recovery in the second half, the immediate concerns over cash flow and margin compression continue to weigh on investor sentiment.