Group 1 - The core viewpoint of the news is that Shengbang Security's performance has significantly declined in 2024, prompting inquiries from the Shanghai Stock Exchange regarding the reasons behind this drop [1] - In 2024, Shengbang Security reported operating revenue of 294 million yuan, a year-on-year increase of 0.93%, while the net profit attributable to shareholders was 1.6285 million yuan, a year-on-year decline of 96.17% [1] - The company acknowledged that the economic environment is challenging and that the cybersecurity industry is undergoing a transformation from compliance to practical application, which presents both challenges and opportunities for the company [1][2] Group 2 - The China Cybersecurity Industry Alliance (CCIA) reported that in 2024, 17 out of 29 listed cybersecurity companies are expected to incur losses, an increase of 2 companies compared to 2023, with a total net profit of -3.353 billion yuan, a year-on-year loss expansion of 141.13% [2] - Shengbang Security stated that its operational situation aligns with industry trends, and it has made improvements in product and sales capabilities, laying a foundation for future development [2] - The company plans to increase investments in research and development, sales, and management, with total expenses in these areas rising by 39.5974 million yuan in 2024, impacting net profits [1][3] Group 3 - Shengbang Security indicated that due to the lagging nature of output in the cybersecurity industry, the development, launch, and scaling of products typically require 12 to 24 months, while market expansion and profitability may take 24 to 36 months [3] - The period from 2023 to 2025 is expected to be one of high investment for the company, with anticipated returns starting to materialize from 2025 onwards [3]

Core Viewpoint - The company experienced a significant decline in performance in 2024, with a notable drop in net profit and cash flow, attributed to increased operational costs and a challenging market environment [2][14][20]. Financial Performance - In 2024, the company achieved operating revenue of 294 million RMB, a year-on-year increase of 0.93%, but the net profit attributable to shareholders was only 1.63 million RMB, down 96.17% [2][15]. - The net cash flow from operating activities was -63.39 million RMB, a decline of 493.39% compared to the previous year [2][15]. - The company’s gross profit margin decreased from 74.19% to 72.64%, reflecting increased costs [15][20]. Business Segments - Revenue from cybersecurity products and services, as well as from the cyberspace mapping business, both saw a decline of 5-6% year-on-year [2][10]. - The newly acquired satellite internet security business generated revenue of 17.94 million RMB in 2024 [2][10]. Customer and Sales Analysis - The company provided detailed information on its top five customers, including contract amounts and sales models, indicating a focus on direct sales and channel partnerships [3][4]. - The sales model includes direct sales to end-users and channel sales through various partnerships [7][10]. Market Context - The overall cybersecurity market in China faced challenges, with 29 listed companies reporting a total revenue decline of 5% in 2024, and 17 companies reported losses, indicating a tough competitive landscape [7][18]. - The company’s performance aligns with industry trends, where many peers also experienced significant profit declines [18][20]. Strategic Initiatives - The company is investing heavily in expanding its sales and R&D teams to enhance its competitive position, with a focus on long-term growth despite short-term financial pressures [14][19]. - The satellite internet security business is seen as a strategic growth area, leveraging existing capabilities in cybersecurity and mapping technologies [12][13][20].