(Yicai) Aug. 15 -- iFlytek's chairman has sold 1.7 percent equity to pay back a loan, the Chinese artificial intelligence developer said after markets closed yesterday. Today, the firm released an upgraded version of its large language model Spark Desk with better code and multimodal capabilities.

Liu Qingfeng pared his stake in the company through the Shenzhen Stock Exchange’s block trading system at a discounted price, diluting his holdings to 5.5 percent, the Hefei, eastern Anhui province-based company said.

The price at which he sold was not disclosed, but, to avoid affecting the stock market, the news was announced after the company’s first-half report was released and before the release of the latest version of Spark Desk, the firm said.

Liu borrowed CNY2.3 billion (USD323.7 million) in July 2021 through pledge financing to subscribe to iFlytek’s non-public shares so as to strengthen his control over the company and meet the firm’s working capital needs. At the time, iFlytek’s share price fluctuated between CNY55 (USD7.50) and CNY68. However, the loan is now due and he has to sell some equity to repay the principal, it said.

Affected by the company’s huge investment in large language models as well as the fallout from being added to the US’ so-called Entity List, which restricts sales of US-made technologies to the firm, iFlytek’s net profit plunged 74 percent in the first half from a year ago to CNY73.5 million (USD10.1 million), according to its latest earnings report released earlier this month. Revenue dipped 2.3 percent to CNY7.8 billion (USD1 billion).

iFlytek’s share price [SHE:002230] was trading down 0.3 percent at CNY63.67 (USD8.76) as of 1.45 p.m. China time today, giving it a market capitalization of CNY147.6 billion (USD20.3 billion). The firm’s stock has risen this year, buoyed by the boom in large language models, and hit a high of CNY81.9 on June 20.

Editor: Kim Taylor