WiMi Hologram(WIMI) - 2025 Q2 - Quarterly Report

Financial Performance - Total operating revenues for the six months ended June 30, 2025, were RMB 188,240,855, a decrease of 35.3% compared to RMB 290,815,771 in the same period of 2024[5] - Gross profit for the six months ended June 30, 2025, was RMB 52,095,196, resulting in a gross margin of 27.7%[5] - Net income attributable to WIMI Hologram Cloud, Inc. for the six months ended June 30, 2025, was RMB 106,297,786, compared to RMB 7,663,918 in the same period of 2024, representing a significant increase[5] - The company reported a comprehensive income of RMB 109,147,739 for the six months ended June 30, 2025, compared to a comprehensive loss of RMB 42,429,344 in the same period of 2024[5] - Net income for the six months ended June 30, 2025, was RMB 126,273,050, a significant increase from RMB 12,288,585 in the same period of 2024[9] - Cash provided by operating activities for the six months ended June 30, 2025, was RMB 213,669,364, compared to RMB 150,230,330 in 2024, reflecting a growth of approximately 42%[9] - Basic earnings per share for the six months ended June 30, 2025, were RMB 10.32, compared to RMB 0.78 for the same period in 2024[6] Assets and Liabilities - Total current assets as of June 30, 2025, were RMB 3,327,364,606, an increase of 65.3% from RMB 2,013,304,853 as of December 31, 2024[2] - Total liabilities decreased to RMB 972,862,068 as of June 30, 2025, from RMB 767,423,442 as of December 31, 2024, indicating improved financial stability[2] - The company’s cash and cash equivalents increased to RMB 1,959,991,776 as of June 30, 2025, up from RMB 1,070,513,011 as of December 31, 2024, reflecting a strong liquidity position[2] - The company’s total shareholders' equity increased to RMB 2,425,749,494 by June 30, 2025, compared to RMB 872,469,629 in June 30, 2024, showing robust growth[9] - As of June 30, 2025, total property, plant, and equipment, net amounted to RMB 58,339,212 (USD 8,149,529), down from RMB 125,811,741 (USD 17,646,000) as of December 31, 2024, reflecting a significant decrease[135] Investments and Capital - Short-term investments increased to RMB 1,229,636,750 as of June 30, 2025, up from RMB 847,927,125 at the end of 2024[132] - Gain from sales of investments amounted to approximately RMB 29,784,104 (USD 4,160,605) for the six months ended June 30, 2025[133] - Capital contribution from noncontrolling interests increased to RMB 541,913,983 in 2024, indicating strong investor confidence[9] - The company’s total additional paid-in capital rose to RMB 2,226,171,080 by June 30, 2025, compared to RMB 1,651,937,055 in June 30, 2024[9] Research and Development - Research and development expenses for the six months ended June 30, 2025, were RMB 33,470,081, a decrease of 55.8% compared to RMB 75,820,156 in the same period of 2024[5] - The company’s stock compensation expenses for the six months ended June 30, 2025, amounted to RMB 22,189,939, reflecting ongoing investment in employee incentives[9] Revenue Recognition - The Company recognizes revenue from AR advertising display services at a point in time when the related services have been delivered, based on specific contract terms[80] - The Company follows a five-step model for revenue recognition, which did not result in significant changes in the way revenue is recorded compared to previous guidance[79] - The Company recognizes revenue when an end user completes a transaction, with service fees generally billed monthly on a per transaction basis[85] Joint Ventures and Subsidiaries - On August 21, 2020, Wimi HK established a joint venture, VIDA Semicon Co., Limited, with a 53% equity interest to develop holographic AR technologies in the semiconductor industry[17] - On April 15, 2021, Wimi HK set up another joint venture, Viru Technology Limited, holding a 55% equity interest to focus on AR services[18] - VIYI Technology Inc. was established on September 24, 2020, to accelerate AI algorithm and cloud computing services development[20] - VIYI acquired 100% equity of Fe-da Electronics on September 28, 2020, to enhance its computer chip and intelligent chip business[21] Risks and Concentration - One customer accounted for 13.50% of total revenues for the six months ended June 30, 2025, while another accounted for 11.23%, indicating increased customer concentration risk[155] - For the six months ended June 30, 2025, three vendors accounted for 16.62%, 12.67%, and 11.45% of total purchases, highlighting vendor concentration risk[156] Tax and Compliance - The company reported a current income tax credit of RMB (2,290,252) (USD 319,930) for the six months ended June 30, 2025, compared to RMB (457,941) for the same period in 2024[146] - The company has a deferred tax asset of RMB 440,346 (USD 61,513) as of June 30, 2025, which reflects the allowance for expected credit loss[147] Other Financial Metrics - The company reported a foreign currency translation adjustment loss of RMB 17,125,311 for the six months ended June 30, 2025[5] - The company experienced a foreign currency translation loss of RMB 17,125,311 for the six months ended June 30, 2025[10] - The average translation rates applied to statement of income accounts for the six months ended June 30, 2025, were RMB 1.00 to USD 0.1392[64]