Yusys Technologies(SZ:300674) Xin Lang Zheng Quan·2025-07-21 09:17Core Viewpoint - Yuxin Technology Group Co., Ltd. is planning an IPO on the Hong Kong Stock Exchange, but its recent financial performance shows significant revenue declines and heavy reliance on a few major clients, raising concerns about its growth prospects and funding necessity [1][10]. Financial Performance - In 2024, Yuxin Technology reported a revenue of 3.958 billion, a decrease of 23.94% year-on-year, and in Q1 2025, revenue further declined to 5.25 billion, down 12.57% year-on-year [2][5]. - The net profit for 2024 was 3.8 billion, reflecting a year-on-year increase of 16.62%, but Q1 2025 saw a sharp drop to 0.58 billion, an increase of 81.09% year-on-year [2][5]. Business Segments - The company operates in three main business segments: banking technology solutions, non-banking technology solutions, and innovative operational services. In 2024, all three segments experienced revenue declines [4][10]. - Revenue from banking IT solutions was 3.461 billion, down 25.78% year-on-year, accounting for 87.45% of total revenue [4][5]. Cost Management - To maintain profitability amidst declining revenues, Yuxin Technology significantly reduced its R&D expenses, which were 4.3 billion in 2024 and 0.31 billion in Q1 2025, representing year-on-year decreases of 24.33% and 27.49%, respectively [6][11]. - The company also cut sales expenses, which were 1.24 billion in 2024 and 0.13 billion in Q1 2025, down 23.21% and 35.16% year-on-year [6]. Client Dependency - Yuxin Technology is heavily reliant on its top five clients, with revenue contributions from these clients being 45.3%, 44.5%, and 42.3% from 2022 to 2024, respectively [10]. - The largest client accounted for 18.9%, 25.4%, and 20.4% of total revenue during the same period, indicating a high dependency on a limited client base [10]. R&D and Workforce - The company reduced its R&D personnel from 1,883 in 2023 to 1,357 in 2024, a decrease of 27.93% [7][8]. - The reduction in R&D staff may be linked to declining client demand, as banks have outsourced some IT functions during their digital transformation [8][10]. International Expansion and Funding - Yuxin Technology's international business remains underdeveloped, with revenue from international operations being less than 1% of total revenue [11]. - The company plans to use IPO proceeds for global expansion and advancing technologies like AI and blockchain, despite significant cuts in R&D spending raising questions about the necessity of the fundraising [11][12].