Summary of the Conference Call for Qimingxingchen (启明星辰) Company Overview - **Company**: Qimingxingchen (启明星辰) - **Industry**: Cybersecurity and AI Solutions Key Points Industry and Market Dynamics - In 2025, the industry faces significant challenges, with many mid-sized companies struggling financially, some unable to continue operations [9] - The overall market demand and customer budgets did not show significant improvement in Q4 2025, with government clients focusing more on IT infrastructure rather than security needs [3] - Specific sectors like military and defense maintain stable security investments, while others like power generation present limited opportunities [3] Strategic Adjustments - Qimingxingchen proactively reduced DICT integrated projects to optimize gross margins, leading to a significant decrease in transactions with China Mobile [2][4] - The company aims to strengthen collaboration with China Mobile in personal, family, and enterprise markets while emphasizing independent innovation [4] - The company is adapting to new application scenarios through product atomization and integration with cloud services [7] Financial and Operational Efficiency - Approximately 700 personnel were optimized in H1 2025, with total adjustments expected to not exceed 1,000 for the year, aimed at improving input-output ratios [2][5] - Continuous cost control measures are in place to maintain a trend of expense reduction in response to market challenges [2][5] AI Developments - Qimingxingchen has made significant advancements in AI for Security, enhancing all products and services with AI technology, resulting in increased operational efficiency and cost savings for clients [8] - Sales in the AI for Security segment have reached hundreds of millions of RMB, with a notable increase in event detection accuracy and daily analysis capacity [8] - In the Security for AI segment, new product orders reached 10 million RMB in H1 2025, but demand growth slowed in Q3 due to mixed user feedback on large model applications [8] Future Outlook - Despite financial data potentially being at the lowest point since the company went public, there is confidence in a recovery in 2026, with a clear strategic direction for future development [3][9] - The company is actively seeking new market opportunities to reflect security value and expand its scale [9] Additional Insights - The focus on IT infrastructure security has not received adequate attention, with most cybersecurity firms primarily offering consulting, construction, and solution services [3] - The new chairman, Yuan Jie, is expected to lead the company in formulating short, medium, and long-term plans, including adjustments in technical capabilities and product offerings [4]