Core Viewpoint - The communication industry is facing significant pressure due to cost-cutting measures by operators, leading to a decline in traditional ICT service performance, which is pushing companies like AsiaInfo Technology to seek new growth opportunities [2][7]. Financial Performance - In the first half of 2025, AsiaInfo Technology reported revenue of approximately 2.598 billion RMB, a year-on-year decrease of 13.2%, and a net loss of about 48 million RMB [2]. - The company's gross profit was 783 million RMB, reflecting a year-on-year increase of 6.1%, with a gross margin rising to 30.1% [2]. - Operating cash flow showed a significant improvement, with a year-on-year reduction in net outflow of 35.3% [2]. New Business Growth Engines - The performance of three emerging business areas—AI large model applications, 5G private networks, and smart operations—has become a new growth engine for AsiaInfo Technology [3][4]. - AI large model delivery generated approximately 26 million RMB in revenue with orders reaching about 70 million RMB, marking a year-on-year increase of 78 times [4][5]. - Orders for 5G private networks amounted to approximately 82 million RMB, a year-on-year increase of 51.7%, despite a revenue decline of 26.3% to 47 million RMB [4][6]. Strategic Adjustments - To address the challenges in traditional ICT support business, which saw a revenue decline of 14.7% to approximately 2.118 billion RMB, AsiaInfo Technology plans to optimize personnel and reduce non-labor costs while maintaining high R&D investment [7][8]. - The company has restructured its business classification, categorizing traditional services as "ICT support business" and identifying AI large model applications, 5G private networks, and smart operations as the three main growth engines [7]. Future Outlook - AsiaInfo Technology aims to solidify its foundation in the communication industry while accelerating the conversion of orders in AI large model applications and 5G private networks to achieve high growth for the year [8]. - The company plans to focus on industries with strong new business application willingness and payment capability, such as energy, oil and petrochemicals, and aviation, to mitigate the impact of the communication industry's downturn [8].

Core Viewpoint - The company reported a decline in revenue for the first half of 2025, primarily due to the impact of cost reductions in the ICT support business from telecom operators, while focusing on high-growth areas such as AI and 5G applications [3][4]. Revenue Performance - The company's total revenue for H1 2025 was 2.598 billion RMB, a year-on-year decrease of 13.2% [3]. - The ICT support business generated 2.118 billion RMB, down 14.7% year-on-year, accounting for 81.5% of total revenue [4]. - The gross profit for H1 2025 was 783 million RMB, with a gross margin of 30.1%, reflecting a 5.4 percentage point increase year-on-year [3]. Business Segmentation - The company has restructured its revenue reporting to focus on three high-growth business lines: smart operations, 5G private networks and applications, and AI model applications and delivery [3]. - The ICT support business is under pressure due to traditional telecom operator cost-cutting, but the company is leveraging AI and cost control measures to mitigate these challenges [4]. 5G Private Network and Smart Operations - Revenue from the 5G private network and applications was 47 million RMB in H1 2025, a decline of 26.3% year-on-year, but the order volume increased by 51.7% [5]. - The smart operations segment saw revenue of 408 million RMB, down 8.8% year-on-year, but non-telecom orders grew significantly, with financial, automotive, and consumer sectors seeing increases of 48.3%, 5.3%, and 4.4% respectively [5]. AI Model Applications - Revenue from AI model applications and delivery reached 26 million RMB in H1 2025, a staggering increase of 76 times year-on-year, with signed order amounts reaching 70 million RMB [7]. - The company is a partner in Alibaba Cloud's AI model initiative and has established nearly 100 projects in collaboration with them [7]. - The company aims for AI model application and delivery orders to reach 200-300 million RMB by 2025, with potential growth to 1 billion RMB by 2027 [7].

Core Insights - The company reported a mid-year revenue of approximately RMB 2.598 billion for 2025, with significant contributions from various business segments [1] - The company is focusing on accelerating order signing and expects significantly better performance in the second half of the year compared to the first half [2] Revenue Breakdown - ICT support business revenue was approximately RMB 2.118 billion, while intelligent operation business revenue was around RMB 408 million [1] - Revenue from 5G private networks and applications was about RMB 47 million, with a year-on-year order amount increase of 51.7% [1] - AI large model application and delivery business revenue reached approximately RMB 26 million, showing a year-on-year growth of 76 times, with order amounts increasing by 78 times [1] Cost Management and Profitability - The company implemented various cost control measures, resulting in a gross profit of approximately RMB 783 million, a year-on-year increase of 6.1%, and a gross margin of 30.1%, up by 5.4 percentage points [1] - The net loss for the reporting period was approximately RMB 202 million, which improved to about RMB 48 million when excluding one-time severance compensation [1] Future Outlook - The company plans to maintain a steady growth strategy, focusing on strengthening the ICT support business and accelerating growth in AI large model applications, 5G private networks, and intelligent operations [2] - The board emphasizes shareholder returns, proposing a dividend guidance of 40% of the annual net profit attributable to shareholders for the end of 2025 [2]