MicroAlgo (US:MLGO)2025-09-10 12:00Financial Performance - Total operating revenues for the six months ending June 30, 2025, were RMB 188,112,127, a decrease of 35.3% compared to RMB 290,441,871 for the same period in 2024[6] - Gross profit for the six months ending June 30, 2025, was RMB 51,571,816, representing a gross margin of 27.4%[6] - Net income attributable to MicroAlgo Inc. for the six months ending June 30, 2025, was RMB 26,470,591, an increase of 62.9% from RMB 16,259,664 in the same period of 2024[6] - Net income for the six months ending June 30, 2025, was RMB 31,736,118, representing a significant increase from RMB 22,176,601 in the same period of 2024, reflecting a growth of approximately 43%[12] - The Company reported a comprehensive income attributable to MicroAlgo Inc. of RMB 18,109,838 for the six months ending June 30, 2025[6] - The Company reported total revenue of RMB 149,090,866 for the year ended December 31, 2024, with no allowance for credit losses on accounts receivable[51] Cash and Liquidity - Cash and cash equivalents increased to RMB 1,813,379,345 as of June 30, 2025, up from RMB 1,035,932,786 as of December 31, 2024[2] - The total cash and cash equivalents at the end of the period on June 30, 2025, reached RMB 1,813,379,345, up from RMB 433,416,702 at the end of the previous period, indicating strong liquidity[12] - The net cash provided by operating activities for the six months ending June 30, 2025, was RMB 31,147,248, a substantial recovery from a cash outflow of RMB 5,063,081 in the same period of 2024[12] - Financing activities generated net cash inflow of RMB 1,079,213,504 for the six months ending June 30, 2025, a significant increase from RMB 127,310,153 in the same period of 2024, driven by stock issuance and convertible debt issuance[12] Assets and Liabilities - Total current liabilities decreased significantly to RMB 71,580,482 as of June 30, 2025, compared to RMB 206,921,631 as of December 31, 2024[2] - Total assets as of June 30, 2025, were RMB 2,368,162,417, reflecting a significant increase from RMB 1,267,134,187 as of December 31, 2024[2] - Accounts receivable, net as of June 30, 2025, was RMB 23,518,435 (USD 3,285,340) with no allowance for credit losses[107] Research and Development - Research and development expenses for the six months ending June 30, 2025, were RMB 33,470,081, a decrease of 56.1% from RMB 75,820,156 in the same period of 2024[6] - The Company’s research and development expenses include salaries, outsourced subcontractors, and related office expenses[74] Investments and Impairments - The company recognized an impairment of RMB 1,102,938 (USD 154,072) for equity method investments due to weak financial conditions[49] - The company disposed of Shenzhen Yiyou Online Technology Co., Ltd. for RMB 10, resulting in a gain of approximately RMB 1,416,187[102] - The total loss on the disposal of Khorgas Weidong Technology Co., Ltd. was approximately RMB 56,134,710[104] - As of June 30, 2025, short-term investments amounted to RMB 472,897,200 (USD 66,060,012) after an investment of RMB 389,427,840 (USD 54,400,000) during the six months ended June 30, 2025[106] Taxation - Under the laws of the Cayman Islands, the Company is not subject to tax on income or capital gain, and no withholding tax is imposed on dividend payments[117] - The applicable tax rate for VIYI Ltd in Hong Kong is 16.5%, but no provisions were made for profit tax as there were no assessable profits since inception[118] - In the PRC, the standard enterprise income tax rate is 25%, with a preferential rate of 15% for High and New Technology Enterprises (HNTEs) that must re-apply for status every three years[119] - As of June 30, 2025, the current income tax expenses amounted to RMB 2,290,252 (approximately USD 319,930) and total income tax expenses were RMB 2,290,252 (USD 319,930)[122] Share Capital and Structure - The Company has undergone multiple share consolidations, with the latest on July 18, 2025, resulting in a share capital of USD 6,000,000,000 divided into 1,000,000,000 shares[140] - The authorized share capital was increased to USD 6,000,000,000 following the share consolidation approved on July 2, 2025[139] - In the first half of 2025, the Company issued 10,503,680 Class A ordinary shares and 1,162,609 Class B ordinary shares, with a total of 10,941,519 Class A and 1,495,942 Class B shares outstanding as of June 30, 2025[144] Revenue Recognition - The Company adopted ASC Topic 606 for revenue recognition, requiring a five-step model to recognize revenue from customer contracts[57] - The Company recognizes revenue from software development contracts over time, with revenue recognized based on progress towards completion[68] - The Company’s performance obligation includes helping customers match consumers and traffic users to increase conversion rates using proprietary data optimization algorithms[64] Geographic Performance - The financial results are reviewed by management based on geographic locations, highlighting the importance of regional performance in revenue generation[167] - Revenues from Mainland PRC amounted to RMB 239,512,194, while Hong Kong revenues were RMB 50,929,677, indicating strong performance in both regions[167]