Core Viewpoint - Lucas GC Limited reported a significant decrease in revenue for the first half of fiscal year 2025, attributed to a slowdown in the Chinese economy and a strategic shift towards higher-margin products [1][3]. Financial Performance - Revenue for 1H 2025 was RMB 386.89 million (US$ 54.01 million), down 36.11% from RMB 605.52 million in 1H 2024 [6][9]. - Gross margin improved to 33.74%, an increase of 200 basis points compared to 31.74% in 1H 2024 [6][9]. - Net income decreased to RMB 21.49 million (US$ 3.0 million) from RMB 53.93 million in the same period last year, resulting in a net income margin of 5.56%, down from 8.91% [6][9]. Management Insights - The CEO emphasized the company's focus on being a technology-driven entity rather than a service provider, which has led to improved gross margins [3]. - The company continues to invest heavily in research and development, with R&D expenses constituting 11.86% of revenue, significantly above the industry average [3]. Patent and Intellectual Property - Lucas GC Limited holds a total of 20 granted patents related to core AI technology, with one additional patent obtained in the reporting period [3][4]. Asset and Liability Overview - Total assets as of June 30, 2025, were RMB 403.25 million (US$ 64.06 million), a decrease from RMB 458.90 million [7][8]. - Current liabilities increased to RMB 137.67 million (US$ 18.45 million) from RMB 132.20 million [7][8]. Revenue Breakdown - Revenue from recruitment services dropped to RMB 31.81 million, while outsourcing services generated RMB 334.47 million [9]. - Other revenue sources contributed RMB 20.61 million, indicating a shift in revenue streams [9]. Shareholder Equity - Total shareholders' equity decreased to RMB 265.58 million (US$ 45.61 million) from RMB 326.71 million [8]. - Retained earnings also saw a decline, falling to RMB 97.12 million from RMB 118.45 million [8].