Financial Performance - The company reported total revenue of 103 million yuan for the first half of 2025, a year-on-year increase of 3.85% [1] - The net profit attributable to the parent company was -83.81 million yuan, a decline of 27.58% year-on-year [1] - In Q2 2025, total revenue was 65.07 million yuan, up 4.87% year-on-year, while the net profit attributable to the parent company was -44.02 million yuan, down 69.65% year-on-year [1] - The gross margin was 24.91%, a decrease of 52.81% year-on-year, and the net margin was -81.36%, down 22.84% year-on-year [1] Financial Ratios - The company's accounts receivable accounted for 172.49% of total revenue, indicating a significant amount of outstanding payments [1] - The total of selling, administrative, and financial expenses was 48.09 million yuan, representing 46.68% of revenue, a decrease of 38.61% year-on-year [1] - The earnings per share (EPS) was -0.54 yuan, a decrease of 28.57% year-on-year, while the net asset per share was 10.43 yuan, down 19.43% year-on-year [1] Business Model and Investment Returns - The company's business model relies heavily on research and development, which requires careful examination of the underlying drivers [3] - Historical data shows a median Return on Invested Capital (ROIC) of 12.74%, but the worst year, 2024, had a ROIC of -18.09%, indicating poor investment returns [3] - The company has experienced two years of losses since its listing, suggesting a fragile business model [3] Cash Flow and Financial Health - The average operating cash flow over the past three years has been -122.57% relative to current liabilities, indicating cash flow concerns [3] - Financial expenses have also been a concern, with the average net cash flow from operating activities being negative over the past three years [3]

Group 1: Company Overview - Beijing Huaru Technology Co., Ltd. focuses on military simulation and AI integration, evolving its core brand XSim® from military simulation to military intelligence [2][3] - The company aims to support China's defense technology advancement into the "Intelligent Victory Era" through its new generation military intelligence system [3] Group 2: XSim® Military Intelligence System - The XSimVerse® military model integrates military domain knowledge with general models, supporting military decision-making, virtual training, digital experiments, training equipment, and intelligent equipment [5][6] - The military intelligence business covers five application areas: intelligent decision-making, virtual training, digital experiments, training equipment, and intelligent equipment [6][7] Group 3: Application Areas - **Intelligent Decision-Making**: Enhances decision-making processes for equipment validation, task planning, and operational support using AI tools [6] - **Virtual Training**: Provides realistic training experiences through a closed-loop training system that combines military models and simulation technology [6] - **Digital Experiments**: Merges digital testing environments with military models to improve the authenticity and complexity of weapon testing [6] - **Training Equipment**: Develops advanced training equipment that simulates real combat environments to enhance trainees' capabilities [7] - **Intelligent Equipment**: Constructs a collaborative system for unmanned equipment, optimizing battlefield awareness and operational efficiency [7] Group 4: AI Toolset - The AI toolset includes five products: XSimStudio® for intelligent simulation, XSimWorld® for digital battlefield creation, XSimAgent© for model training, XSimForce for digital troop modeling, and XSimLink® for real-time mapping [8] Group 5: Drone Simulation Training System - The drone simulation training system utilizes distributed simulation technology, offering realistic environments and diverse training modes, including single and multi-operator training [8] Group 6: Cloud Brain for Unmanned Systems - The "Cloud Brain" system addresses challenges in unmanned systems' intelligence levels and coordination, utilizing edge computing and AI technologies for enhanced operational capabilities [9] Group 7: Market Demand and Brand Development - The integration of military models and AI tools has increased potential customer demand through product upgrades [9] - The company is nurturing its subsidiary "Xiaoru Culture" to innovate in the digital cultural sector, focusing on online game development and IP derivative products [9]