Core Viewpoint - Mingyuan Cloud's revenue for the first half of 2025 fell short of expectations, declining by 15.9% year-on-year to 610 million yuan, primarily due to headwinds in the real estate industry; however, adjusted net profit reached 33.12 million yuan, marking a turnaround from a loss of 16.96 million yuan in the same period last year, benefiting from effective cost control [1][2] Industry Trends - The ongoing headwinds in the industry continue to impact performance, with a decrease in short-term contracts leading to revenue pressure across various business lines; cloud service revenue dropped by 14.3% to 520 million yuan, with specific declines in customer relationship management, project construction, and PaaS platform revenues [1] - The company anticipates a narrowing of revenue decline in the second half of 2025 as the industry stabilizes and the effects of business focus become more apparent [1] Growth Drivers - AI and overseas markets are emerging as significant growth drivers; in the first half of 2025, the company achieved a signing amount of 32 million yuan for its AI products, surpassing the total for the previous year, and has covered approximately 2,000 real estate projects [1] - The company also reported a signing amount of about 15 million yuan in overseas markets and completed the acquisition of ASIOT Co., Ltd. in Japan, with expectations of reaching 50 million yuan in overseas product signing amounts for the entire year [1] Cost Reduction and Efficiency - The company has made significant progress in cost reduction and efficiency improvement, with overall expenses (excluding share-based payments) decreasing by 20% to 560 million yuan; management, R&D, and marketing expenses saw declines of 5%, 21%, and 22% respectively [2] - The adjusted net profit of 33.12 million yuan reflects successful cost control measures, while operating cash flow net outflow narrowed by 74% year-on-year [2] Profit Forecast and Valuation - Due to industry headwinds, revenue forecasts for 2025 and 2026 have been lowered by 18.0% and 17.6% to 1.27 billion yuan; however, adjusted net profit forecasts have been revised upward to 68.10 million yuan and 87.05 million yuan for the same years due to effective cost management [2] - The company maintains an outperform rating and a target price of 3.5 HKD, based on a 5x price-to-sales ratio for 2025 [2]