Summary of Mingyuan Cloud Conference Call Company Overview - **Company**: Mingyuan Cloud - **Industry**: Real Estate Technology and Cloud Services Key Financial Performance - **Revenue**: Total revenue for H1 2025 was 606 million RMB, a decrease of 15.9% compared to 720 million RMB in H1 2024 [3] - **Gross Profit**: Gross profit was 486 million RMB, down 15.9% from 578 million RMB in the previous year, maintaining a gross margin of 80.2% [3] - **Net Profit**: Net profit reached 13.7 million RMB, a significant improvement of 111.9% from a loss of 115 million RMB in H1 2024 [3] - **Adjusted Net Profit**: Adjusted net profit was 33.1 million RMB, an increase of 295.3% from a loss of 17 million RMB in the previous year [2][3] - **Cost Reduction**: Overall expenses decreased by 20%, with R&D and marketing expenses down by 20.5% and 22%, respectively [2][5] Asset and Liability Situation - **Total Assets**: As of June 30, 2025, total assets were 5.311 billion RMB, a slight decrease from the end of 2024 [6] - **Debt Ratio**: The debt-to-asset ratio was 15.3%, indicating a stable financial position [6] - **Cash Reserves**: Cash reserves stood at 4.1 billion RMB, providing a solid foundation for future growth [7] Market and Revenue Breakdown - **Real Estate Market Impact**: The Chinese real estate market downturn affected revenue, with cloud services and localized deployment revenues down by 14% and 24%, respectively [2][9] - **Cloud Customer Management**: The cloud customer management product line saw a 51% revenue decline, although the average transaction price in sales offices increased by 24% [10] - **Project Construction Revenue**: Revenue from project construction products decreased by 25.5% due to a decline in new project starts [11] - **Asset Management Growth**: Asset management and operations revenue grew by 2%, with state-owned enterprises accounting for 84.8% of this revenue [13] Strategic Developments - **AI Product Development**: AI product contracts exceeded the total amount from the previous year, with 100 new projects signed [2][10] - **International Expansion**: The company has established local teams in several regions, including Japan, and acquired ASOTO, enhancing its AI and IoT capabilities [4][15][21] - **Future Market Outlook**: The company anticipates significant growth in the global real estate technology market, projected to exceed 80 billion USD by 2032 [16][42] AI and Technology Integration - **AI Implementation**: Over 20% of customer service inquiries are now handled by AI, with an accuracy rate exceeding 60% [17] - **Link Force Platform**: The Link Force platform, which integrates AI and IoT for labor management, has been successfully implemented in Hong Kong [19] - **AI in Marketing**: The company is leveraging AI in marketing strategies to enhance customer acquisition and engagement [26] Challenges and Future Directions - **Market Conditions**: The residential real estate market is stabilizing but requires time to recover fully [34] - **Focus on Quality Clients**: The company is shifting its focus towards higher-quality clients and projects, moving away from less profitable engagements [16] - **Cash Management Strategy**: Plans to maintain a conservative cash management strategy while investing in high-growth potential areas [43] Conclusion Mingyuan Cloud is navigating a challenging real estate market while focusing on cost efficiency, AI integration, and international expansion. The company is poised for future growth through strategic investments and a commitment to enhancing its technological capabilities.

Core Viewpoint - The real estate industry is currently in a smooth adjustment phase, with a significant decline in contract amounts affecting revenue recognition for the first half of 2025, leading to an expected total revenue of 610 million RMB, a year-on-year decrease of 14.8% [3] Revenue Performance in 2024 - In 2024, the company's revenue was 1.435 billion RMB, down 12.5% year-on-year, with an adjusted net loss of 40 million RMB, an improvement from a loss of 170 million RMB in 2023, primarily due to a substantial reduction in expenses [4] - Total expenses for 2024 were 1.484 billion RMB, a decrease of 28.8% year-on-year, with sales, management, and R&D expenses down 17.8%, 53.0%, and 25.0% respectively [4] - The company reduced its workforce from 4,247 in 2021 to 1,912 by the end of 2024, with further reductions expected to 1,600-1,700 by mid-2025 [4] - Revenue breakdown includes: - Customer relationship management revenue of 859 million RMB, down 9.2% year-on-year, with cloud customer revenue at 810 million RMB, down 6.6% [4] - Project construction revenue of 124 million RMB, down 20.7% year-on-year [4] - Asset management and operation revenue grew 14.2% to 100 million RMB, driven by local city investment companies focusing on revitalizing existing real estate [4] - Tianji PaaS platform revenue decreased 24.6% to 112 million RMB, significantly impacted by reduced demand from residential developers [4] AI Product Development - The company has launched multiple AI+ marketing products, with total signed amounts for AI products in 2024 reaching approximately 28 million RMB, covering around 1,000 real estate projects [5] - The average contract value for signed projects is about 28,000 RMB per project per year [5] - In February 2025, the company announced the integration of the DeepSeek large model into its AI digital marketing products, successfully applied in over 2,500 projects across real estate, home furnishings, and automotive industries, with a daily inference volume exceeding 120,000 [5] - Expected AI product signed amounts for the first half of 2025 are around 30 million RMB, with a total for 2025 projected to reach 60 million RMB [5]

Core Viewpoint - The real estate industry is currently in a relatively smooth adjustment phase, with a significant decline in contract amounts affecting revenue expectations for the first half of 2025, leading to an anticipated revenue drop of 14.8% year-on-year to 610 million RMB [1] Revenue Performance - In 2024, the company's revenue was 1.435 billion RMB, a year-on-year decline of 12.5%, with an adjusted net loss of 40 million RMB, an improvement from a loss of 170 million RMB in 2023, primarily due to a substantial reduction in expenses [2] - Total expenses for 2024 were 1.484 billion RMB, down 28.8% year-on-year, with sales, management, and R&D expenses decreasing by 17.8%, 53.0%, and 25.0% respectively [2] - The workforce has been reduced from 4,247 in 2021 to 1,912 by the end of 2024, with further reductions expected to 1,600-1,700 by mid-2025 [2] Business Line Performance - Customer relationship management revenue was 859 million RMB, down 9.2% year-on-year, with cloud customer revenue at 810 million RMB, a decline of 6.6% [2] - Project construction revenue decreased by 20.7% to 124 million RMB [2] - Asset management and operations revenue grew by 14.2% to 100 million RMB, driven by local city investment companies focusing on revitalizing existing real estate for operational gains [2] - Revenue from the Tianji PaaS platform fell by 24.6% to 112 million RMB, significantly impacted by reduced demand from residential developers [2] AI Product Development - The company has deepened its AI product matrix, with expected contract amounts for AI products in 2025 potentially exceeding expectations, aiming for 30 million RMB in the first half and 60 million RMB for the entire year [3] - In 2024, the cumulative contract amount for cloud customer AI products reached approximately 28 million RMB, covering around 1,000 real estate projects [3] - The integration of the DeepSeek large model into the company's AI digital marketing products has been successful, with applications in over 2,500 projects across three industries, achieving a daily inference volume exceeding 120,000 [3] Profit Forecast and Valuation - Revenue forecasts for 2025-2026 have been revised down to 1.29 billion RMB and 1.24 billion RMB respectively, with a new forecast for 2027 at 1.25 billion RMB [4] - Non-GAAP net profit predictions for 2025-2026 are maintained at 57 million RMB and 108 million RMB, with a new forecast for 2027 at 175 million RMB [4]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The real estate industry is in a relatively smooth adjustment phase, with a significant decline in the company's contracted project amounts in 24H2, leading to a forecasted revenue drop of 14.8% year-on-year for 1H25, amounting to 610 million RMB [1] - The company is focusing on the commercialization of AI products, with expectations for AI product contract amounts in 2025 to exceed previous estimates, potentially reaching 60 million RMB [3] - The company has implemented strong cost control measures, which are expected to accelerate the path to breakeven, despite a downward revision of revenue forecasts for 2025-2026 [4] Revenue Performance - In 2024, the company reported a revenue of 1.435 billion RMB, a year-on-year decline of 12.5%, with an adjusted net loss of 40 million RMB, an improvement from a loss of 170 million RMB in 2023 [2] - The breakdown of revenue shows a decline in customer relationship management revenue by 9.2% to 859 million RMB, while asset management and operations revenue grew by 14.2% to 100 million RMB [2] AI Product Development - The company has launched multiple AI+ marketing products, with a total contract amount of approximately 28 million RMB for AI products in 2024, covering around 1,000 real estate projects [3] - The integration of the DeepSeek large model into the company's AI digital marketing products has been successful, with daily inference usage exceeding 120,000 [3] Financial Forecasts - The revenue forecasts for 2025 and 2026 have been revised down to 1.291 billion RMB and 1.243 billion RMB respectively, with a new forecast for 2027 set at 1.25 billion RMB [4] - Non-GAAP net profit forecasts for 2025 and 2026 are maintained at 57 million RMB and 108 million RMB respectively, with a new forecast for 2027 at 175 million RMB [4]