Silkroad Visual(SZ:300556) Zheng Quan Zhi Xing·2025-06-20 12:40Core Viewpoint - The credit rating of Silk Road Vision Technology Co., Ltd. has been downgraded to A with a stable outlook due to significant revenue decline and increased financial risks, influenced by macroeconomic adjustments and reduced government budgets [1][3][5]. Company Overview - Silk Road Vision is one of the earliest companies in China engaged in digital visual services, covering a wide range of businesses including digital exhibition, digital content application, smart city solutions, and AR/VR/MR interactive content [3][13]. - As of the end of 2024, the company had total assets of 18.02 billion yuan and equity of 5.83 billion yuan, with a significant drop in revenue to 5.88 billion yuan and a total loss of 4.23 billion yuan [8][9]. Financial Performance - In 2024, the company experienced a 58.91% year-on-year decline in total revenue, with the digital exhibition business dropping by 61.99% [16][18]. - The gross profit margin turned negative, with a comprehensive gross margin decrease of 45.65 percentage points to -15.74% [18]. - As of March 2025, the company reported a net cash outflow from operating activities, indicating weakened debt repayment capacity [5][7]. Market Environment - The CG (Computer Graphics) industry in China is characterized by low concentration and intense competition, with many small firms adopting low-price strategies [11][12]. - The industry is experiencing rapid growth, driven by increasing demand in sectors such as film, gaming, and advertising, with the digital creative industry expected to continue expanding [10][11]. Business Operations - The company has a sufficient order backlog, with 103 contracts in hand for digital exhibition projects as of March 2025, indicating potential for future revenue [6][18]. - The company has implemented cost-cutting measures and adjusted its client structure to improve efficiency and reduce losses [5][16]. Management and Structural Changes - The company underwent significant personnel optimization, reducing its workforce by 682 employees by the end of 2024, which contributed to a decrease in total expenses [16][17]. - Management has revised several internal policies to enhance operational efficiency and governance [15][16].