Core Viewpoint - The company is facing a comprehensive crisis due to regulatory scrutiny revealing accounting irregularities, asset impairment affecting profits, and a decline in market share of its core business [1][19]. Group 1: Regulatory Issues and Accounting Irregularities - The company received an administrative regulatory decision from the Shenzhen Regulatory Bureau on October 31, 2025, requiring rectification of identified issues, exposing four major problems from accounting loopholes to internal control failures [2][20]. - Revenue accounting is non-compliant; the company did not recognize bad debt losses when clients refused to pay contract balances, leading to a simultaneous reduction in revenue and profit. For instance, a project with a 20 million yuan payment refusal resulted in a 20 million yuan underreporting of revenue [2][20]. - Insufficient basis for long-term equity investment impairment tests; the management's revenue growth predictions lacked industry data support, leading to inadequate impairment provisions [2][20]. - Confusion in accounting for non-current financial assets, with inconsistent treatment and arbitrary changes in valuation methods, resulting in a fair value loss of 232 million yuan in 2024, accounting for 54.6% of that year's losses [3][22]. - Inadequate bad debt provisions due to errors in historical recovery statistics, leading to an under-provision of 82 million yuan, which inflated current profits [3][22]. Group 2: Declining Core Business Performance - The company, a listed financial software service provider, has seen a dramatic decline in performance, with revenue dropping from 1.592 billion yuan in 2023 to 1.342 billion yuan in 2024, a year-on-year decrease of 15.7% [5][23]. - The gross profit margin has been on a downward trend, falling nearly 4.6 percentage points to 40.45% in 2024, down over 30 percentage points from 71.62% in 2020 [9][25]. - The net profit attributable to shareholders plummeted from 263 million yuan in 2021 to only 61 million yuan and 68 million yuan in 2022 and 2023, respectively, with a further drop to -425 million yuan in 2024, marking the first loss since the company went public in 2014 [11][27]. - In 2025, the crisis continues, with a reported revenue of 937 million yuan in the first three quarters, a year-on-year decline of 5.2%, and a net loss of 43.21 million yuan, indicating a near depletion of core business profitability [13][29]. Group 3: Market Position and Future Outlook - The company's traditional business model is becoming less suitable for the current market environment, with significant internal control issues and declining performance being exposed under regulatory scrutiny [17][33]. - Unlike competitors that have adopted standardized product strategies, the company remains heavily reliant on customized software development, which has hindered its ability to maintain profitability [14][30]. - The company’s core products are nearing the end of their lifecycle, and new technological investments have not yet yielded commercial success, with no significant innovations reported [15][31]. - Shareholder sentiment is declining, as evidenced by a reduction in the shareholding percentage of the top ten shareholders from 21% to 19.66% in 2025, indicating a lack of confidence in the company's future [16][32].