Core Viewpoint - The report outlines the continuous supervision of Gaoling Information Technology Co., Ltd. by Changcheng Securities, indicating no major issues found during the first half of 2025 [1] Group 1: Continuous Supervision - Changcheng Securities is responsible for the ongoing supervision of Gaoling Information after its listing, with a report due in the first half of 2025 [1] Group 2: Major Risk Items - The company faces core competitiveness risks, including new product development challenges in technology-intensive sectors such as military communications and network security [2] - There is a risk of talent loss, particularly among core technical personnel, which could adversely affect the company's technological advancement and product development [3] - The company emphasizes the importance of maintaining strict confidentiality of core technologies, as any leakage could harm its competitive edge [4] Group 3: Operational Risks - The company has a high concentration of major clients, primarily defense and government units, making it vulnerable to fluctuations in demand due to budgetary or policy changes [5] - Seasonal fluctuations in revenue are noted, with higher income typically realized in the second half of the year, which may affect financial projections [6] - The company must renew its military and industry qualifications periodically, and failure to do so could negatively impact operations [7] Group 4: Financial Risks - Delays in signing contracts for military communication equipment could lead to significant revenue fluctuations [8] - The company's gross margin is subject to variability due to factors such as national policies and raw material costs [9] - Accounts receivable pose a risk, with a significant portion being overdue, which could impact future operations if payments are delayed [10] Group 5: Industry Risks - The military communication equipment sector may experience revenue volatility due to changes in government policies and budget constraints [11] - The network content security business is at risk of budget cuts due to broader economic conditions affecting provincial funding [12] - The nascent market for internal security solutions may face challenges in acceptance and implementation [13][14] Group 6: Financial Performance - In the first half of 2025, the company reported a revenue increase of 12.55 million, a growth rate of 15.55%, driven by projects in environmental monitoring and data services [16] - Net profit and total profit decreased by 8.99 million and 10.57 million respectively, attributed to rising operational costs and declining efficiency in accounts receivable turnover [16] - Research and development expenditure as a percentage of revenue decreased by 13.89 percentage points due to a reduction in personnel and project-specific material costs [16] Group 7: Core Competitiveness - The company maintains a strong competitive position in military communication equipment and network security, supported by a robust R&D framework and established market relationships [17] - The departure of a key technical personnel member is not expected to impact the company's core competencies or ongoing projects significantly [19] Group 8: R&D and Fund Utilization - The company has authorized five new patents and seven software copyrights in the first half of 2025, enhancing its intellectual property portfolio [20] - As of June 30, 2025, the company has utilized 261.68 million in raised funds, with a remaining balance of 918.39 million, ensuring compliance with regulatory requirements [22][23]

Core Viewpoint - The acquisition of 100% equity in Xinnuo Communication by Gaoling Information has been terminated due to a lack of consensus among the parties involved in the transaction [1][5]. Group 1: Acquisition Details - Gaoling Information planned to acquire Xinnuo Communication for six months but announced the termination of the acquisition on June 2, 2024 [1]. - The termination was attributed to the failure of the parties to reach an agreement on the final transaction plan [1][5]. - Xinnuo Communication had submitted an IPO application in June 2023, which was accepted by the Shanghai Stock Exchange, but it was voluntarily withdrawn on June 25, 2024 [4]. Group 2: Financial Performance - Gaoling Information has experienced a decline in revenue for two consecutive years, with reported revenues of CNY 5.17 billion, CNY 3.56 billion, and CNY 2.66 billion from 2022 to 2024, reflecting year-on-year changes of 4.48%, -31.13%, and -25.23% respectively [7]. - The net profit has also decreased for three consecutive years, with figures of CNY 884.17 million, CNY 460.52 million, and a loss of CNY 522.76 million for the same period, showing year-on-year declines of 25.66%, 47.92%, and 213.52% respectively [7]. - In 2024, the company reported its first loss since going public, primarily due to reduced demand in the military telecommunications equipment sector and increased accounts receivable [7][8]. Group 3: Research and Development - Despite financial challenges, Gaoling Information maintained stable R&D investment, amounting to CNY 80.04 million in 2024, which constituted 30.03% of its revenue [1][9]. - The company has focused its R&D efforts on advanced technologies such as secure fixed-line communication, integrated communication technology, and artificial intelligence, targeting key business areas like military communication network construction [9].