Core Viewpoint - Aerospace Information (航天信息) is experiencing significant downward pressure on its 2024 performance, with a substantial decline in both revenue and net profit due to industry changes and unmet expectations in digital tax services [1][2]. Revenue Decline - The company reported a 33.93% year-on-year decrease in revenue to 8.309 billion yuan, a reduction of 4.266 billion yuan compared to the previous year [1]. - Revenue has declined for three consecutive years, with figures of 19.314 billion, 12.575 billion, and 8.309 billion yuan from 2022 to 2024, resulting in a compound annual decline of 33.2% [2]. - Despite a 62.34% quarter-on-quarter increase in Q4 2024 to 2.532 billion yuan, the year-on-year revenue still saw a slight decline of 0.10% [2]. Business Segment Performance - The three main business segments all experienced double-digit declines: - Enterprise tax service revenue (42.7% of total) fell by 40.23%, with a gross margin drop of 8.99 percentage points to 33.56% [2]. - Smart business revenue decreased by 40.20%, impacted by extended payment cycles in smart city projects [2]. - Network information business revenue dropped by 12.97%, facing intense competition in the government information market [2]. Profitability and Cash Flow - The company's profitability has deteriorated, with the gross margin declining from 26.25% in 2022 to 23.81% in 2024, leading to a significant drop in profits [3]. - The net profit excluding non-recurring items has been negative for two consecutive years, with a loss of 331 million yuan in 2024, indicating weakened core business capabilities [3]. - Operating cash flow turned negative, dropping from 875 million yuan in 2023 to -167 million yuan, highlighting liquidity pressures [3]. Shareholder Actions - Major shareholders, including various funds and ETFs, have reduced their holdings, signaling concerns about the company's future profitability and market outlook [4]. - The company's valuation is misaligned with its fundamentals, as the rapid decline in traditional tax control business and increased competition in digital tax services have raised concerns about future performance [4]. - The current price-to-sales ratio of 2.03 is higher than comparable companies, indicating potential valuation pressure if the company fails to meet profit forecasts [4].