Core Viewpoint - The retirement of Liu Jiren marks a significant transition for Neusoft, a company with a vast business layout but lacking strong market competitiveness and product strength. Despite historical achievements, Neusoft has struggled with low net profits and stock prices, raising questions about its future direction post-founder retirement [1][2]. Group 1: Company History and Development - Neusoft was founded in 1991 as a collaboration with a Japanese company, which significantly influenced its early growth and international outsourcing success [4][6]. - The company initially thrived on outsourcing, with Japanese clients accounting for 80% of its outsourcing revenue at one point, establishing Neusoft as a notable player in the software industry [4][6]. - Despite early successes, Neusoft faced challenges as the global outsourcing market evolved, particularly after the 2008 financial crisis, which reduced demand for outsourcing services [13][14]. Group 2: Business Transformation and Current Challenges - Neusoft has been transitioning from low-end outsourcing to solutions and services, recognizing the limitations of its previous business model [22][25]. - The company has diversified into sectors such as healthcare, smart vehicles, and smart cities, aiming to leverage emerging technologies like AI [25][26]. - Despite a broad business layout, Neusoft struggles with low profit margins and high competition, with its largest revenue segment, smart vehicle connectivity, yielding only a 13.9% gross margin [26][27]. Group 3: Market Position and Future Outlook - Neusoft's historical reliance on outsourcing has led to perceptions of being a low-end service provider, lacking core technology and brand strength [17][16]. - The company has faced difficulties in maintaining competitive advantages, with its R&D investment significantly lower than industry peers, impacting its innovation capabilities [27][28]. - Neusoft's stock performance has been lackluster, reflecting broader challenges in the Chinese software industry, where many companies struggle with low profitability and high operational costs [28][29].