Group 1: Company Performance Overview - The company has turned a profit in the first half of the year, with revenue and net profit both showing year-on-year growth in Q2 [3] - New signed contracts have increased by 14% year-on-year, with international orders up by 135% and enterprise business orders up by 32% [3] - The company's organizational capabilities have returned to pre-reform levels, indicating improved operational efficiency [3] Group 2: Strategic Development - The company is focusing on enhancing market share in its primary growth areas through organizational restructuring, consolidating five subsidiaries into a unified entity [4] - Accelerating the development of secondary growth areas, such as construction, water conservancy, and enterprise sectors, by integrating resources from previously dispersed subsidiaries [4] - The internationalization strategy has shifted to include both foundational software platforms and standardized industry application solutions, leading to significant contract growth [6] Group 3: AI Strategy and Implementation - The company has been exploring AI in GIS since 2018, with significant advancements leading to the release of AI GIS 2.0 in 2024 [6][9] - AI orders have increased by over 100% year-on-year, indicating strong market demand for AI-integrated solutions [6] - The company aims to become a leader in geospatial AI, enhancing precision, efficiency, and user experience across its product lines [10][11] Group 4: Financial Performance and Projections - The company experienced a rebound in revenue and profit in Q2 due to organizational adjustments and accelerated project deliveries [20] - Cost optimization measures have been implemented, leading to savings in personnel and operational expenses [20] - AI-related orders are projected to grow significantly, with expectations of doubling previous year's figures [19] Group 5: Risk Management - The company advises investors that forecasts regarding industry trends and future operations should not be viewed as guarantees [21]

Industry Developments - Chengdu government has introduced new policies to encourage the development of gaming and esports companies, indicating increasing local government support for the ACG industry [2][3] - The Chengdu government announced 15 policy measures aimed at enhancing game content creation, strengthening esports competitiveness, promoting industry integration, and improving development factors to elevate the gaming and esports industry [3] Company News - Yuewen Group announced a plan to acquire a 26.67% stake in Wuhan Yihua Kaitian Cultural Communication Co., Ltd. for 325 million yuan, increasing its ownership from 5.17% to approximately 31.48% [4] - After the acquisition, Tencent, the controlling shareholder of Yuewen, will hold a total of 61.82% of Yihua Kaitian, becoming the largest shareholder [4] - Xishanju's sci-fi mech battle game "Jiexianji" is set for global public testing on July 2, 2025, and will be available on PC, Steam, and Xbox Series X|S [5] - The highly anticipated domestic single-player game "Mingmo: Yuanshu Zhi Yu" has released a new trailer and is scheduled for official release on July 24 [6] Regulatory Updates - Following a U.S. ruling against Apple, the European Commission has mandated that Apple must open third-party payment options within 30 days in the EU market, with a potential fine of 500 million euros (approximately 4.096 billion yuan) for non-compliance [7] International Developments - Riot Games has announced its entry into the physical card game market with "Runeterra," based on the League of Legends IP, set to launch this year [8] - South Korean developer Shift Up has unveiled its flagship new game "Project Spirit," themed around "Eastern Fantasy," which is a cross-platform subculture project [9] - Niantic, the developer of "Pokémon GO," has confirmed the sale of its gaming business to Scopely for $3.5 billion, which includes titles like "Pokémon GO" and "Monster Hunter Now" [10]

Core Viewpoint - In 2024, SuperMap Software Co., Ltd. faced significant operational challenges, with key financial indicators showing substantial declines, particularly a 212.70% year-on-year decrease in net profit and a 583.49% drop in net cash flow from operating activities [1][18]. Revenue and Profit: Decline in Scale and Profitability - The company's operating revenue for 2024 was 1,497,872,642.24 yuan, down 24.30% from 2023's 1,978,685,866.97 yuan, primarily due to a 24.52% decrease in software business revenue [2]. - The decline in revenue was attributed to market environment impacts, delayed customer demand, slower bidding processes, and extended project acceptance periods, with the largest revenue drop occurring in the North China region at 32.28% [2]. Net Profit: Multiple Factors Leading to Sharp Decline - The net profit attributable to shareholders was -171,429,329.14 yuan, compared to 152,110,488.98 yuan in 2023, marking a 212.70% decline [3]. - The significant drop in net profit was influenced by reduced operating revenue, poor cost control, and asset impairment, with asset impairment losses reaching 159,645,564.59 yuan [3]. Earnings Per Share: Consistent Decline with Net Profit Trends - Basic earnings per share were -0.3508 yuan, down 213.45% from 0.3092 yuan in 2023, reflecting a substantial decline in core business profitability [4]. Expense Analysis: Structural Adjustments and Optimization Needed - Total expenses decreased to 827,711,957.41 yuan in 2024 from 863,566,503.36 yuan in 2023, indicating some success in expense management during organizational changes [5]. - Sales expenses were 287,965,184.45 yuan, down 11.85%, primarily due to reduced labor and travel costs, suggesting a strategic adjustment in sales efforts [6]. - Management expenses slightly decreased by 3.91% to 269,759,731.48 yuan, indicating potential for improved operational efficiency [7]. - Financial expenses were -4,431,400.85 yuan, reflecting a decrease in interest income, which may impact overall funding returns [8]. R&D Investment: Continued Focus for Future Development - R&D expenses increased by 4.56% to 274,418,442.33 yuan, demonstrating the company's commitment to innovation despite current profitability challenges [10]. - R&D investment amounted to 381,061,073.21 yuan, representing 25.44% of operating revenue, highlighting the company's focus on technological advancement [11]. - The proportion of R&D personnel increased slightly to 42.64%, although there was a decline in the number of experienced staff, indicating a shift towards a younger workforce [12]. Cash Flow: Deterioration in Operating Cash Flow - The net cash flow from operating activities was -269,033,286.07 yuan, a 583.49% decline from 55,644,310.44 yuan in 2023, primarily due to reduced sales collections [13]. - The net cash flow from investment activities increased significantly to 263,780,099.81 yuan, mainly from redeeming financial products [14]. - The net cash flow from financing activities was -203,483,258.81 yuan, a 1,053.30% decrease, largely due to the absence of employee stock option exercise funds [15]. Overall Assessment - SuperMap Software is under considerable operational pressure in 2024, with deteriorating net profit and cash flow requiring close attention from investors. The company's focus on R&D and organizational changes is positive, but improving profitability and cash flow in the short term will be crucial for future growth [18].