China Securities Network Financial Report Analysis: Revenue up 14.03%, Net Profit Excluding Non-Recurring Items down 8.52%

Core Profitability Indicators Analysis

Operating Revenue: Growth Driven by Overseas Business Up 14.03%

In 2025, the company achieved an operating revenue of 751.025 million yuan, a year-over-year increase of 14.03%, mainly due to significant growth in overseas business income. By industry, revenue from government, telecom operators, and other industries were 387.07 million yuan, 288.45 million yuan, and 75 million yuan respectively, with growth rates of 13.39%, 18.14%, and 3.29%. By product, revenue from mobile network products, network content security products, and data and network security products increased by 28.62%, 52.46%, and 51.42% YoY, becoming the main growth drivers, while broadband network product revenue declined by 13.23% YoY. Regionally, revenue in Northeast China, overseas, and Southwest China grew by 3044.93%, 68.88%, and 94.35%, respectively, with overseas business making a significant contribution.

Net Profit: Growth Driven by Non-Recurring Gains and Losses Up 15.83%

Net profit attributable to shareholders of the listed company was 69.41 million yuan, up 15.83% YoY. However, net profit after deducting non-recurring gains and losses was 48.43 million yuan, down 8.52% YoY, mainly due to a significant increase in government grants included in non-recurring gains, which amounted to 21.19 million yuan in 2025, a substantial rise from the previous year, becoming the main factor driving net profit growth.

Earnings Per Share: Basic EPS Increased to 0.41 Yuan

Basic earnings per share (EPS) was 0.41 yuan/share, up 17.14% YoY; non-recurring EPS was 0.28 yuan/share, down 16.18%. The increase in EPS mainly stems from net profit growth, while the decline in non-recurring EPS reflects weakened core business profitability.

Cost Structure Analysis

Total Expenses: Up 5.97% YoY

Total expenses, including selling, management, and R&D expenses, amounted to 505 million yuan, a 5.97% increase, maintaining stable growth aligned with revenue increase.

Selling Expenses: Slight Increase of 1.82%

Selling expenses were 193.33 million yuan, up 1.82%, mainly used for market expansion and customer maintenance. Salaries, marketing services, travel expenses, etc., constitute a large proportion, reflecting ongoing investment in market channels and customer relations.

Management Expenses: Up 7.10%

Management expenses reached 73.51 million yuan, up 7.10%, mainly due to increased salaries, depreciation, and amortization, indicating expansion of management scale and operational costs.

Financial Expenses: Up 63.83%

Financial expenses were -16.27 million yuan, up 63.83%, mainly because interest income decreased compared to last year and foreign exchange losses increased. Interest income for the period was 28.66 million yuan, a decrease of 9.06 million yuan; additionally, increased exchange losses led to a significant rise in financial expenses.

R&D Expenses: Up 9.23%

R&D expenses totaled 238.47 million yuan, up 9.23%, accounting for 31.68% of operating revenue. R&D investments focus on UAV detection, electromagnetic inspection equipment, multi-dimensional anti-fraud analysis systems, etc., enhancing product competitiveness.

R&D Personnel Overview

The company’s R&D staff numbered 663, a 2.00% increase YoY. R&D personnel account for 53.13% of total employees, down 1.54 percentage points. Among them, master’s degree holders increased by 6.86%, and R&D staff aged 30-40 increased by 15.84%, reflecting a trend toward a younger, higher-educated R&D team, which supports innovation and technological strength.

Cash Flow Analysis

Operating Cash Flow: Net Decline of 21.84%

Net cash flow from operating activities was 95.25 million yuan, down 21.84%. The main reason is increased inventory buildup, with cash paid for goods, labor, and other operating expenses rising sharply, despite a 17.27% increase in cash received from sales, leading to a decline in net operating cash flow.

Investing Cash Flow: Net Increase of 514.14%

Net cash flow from investing activities was 65.38 million yuan, up 514.14%, mainly due to increased cash recovered from investments. The company received 855 million yuan from investment recoveries, an increase of 185 million yuan, turning the cash flow from investing into positive territory.

Financing Cash Flow: Slight Decrease of 0.72%

Net cash flow from financing activities was -48.96 million yuan, down 0.72%, mainly because there were no new loans this period, and debt repayments and dividend distributions caused cash outflows.

Risk Factors Analysis

AI Technology Iteration Risk

Rapid AI development may render existing products less competitive if the company fails to keep pace with technological upgrades and optimize user experience. Competition for core AI talent is fierce, with high turnover risk. The company is addressing this by optimizing talent incentives, building a flat cross-departmental structure, focusing on AI core technology R&D, and formulating clear AI development strategies to mitigate risks.

Market Competition Intensification

Increasing competition domestically and internationally in areas like network visualization and content security, along with geopolitical, trade protectionism, and exchange rate uncertainties overseas, pose challenges. The company is promoting balanced domestic and international development, strengthening local overseas channels, and improving product adaptation and global delivery experience to cope with competitive pressures.

Business Expansion Scale Risks

As market coverage expands, existing organizational structures, management systems, and workflows may struggle to adapt. The company is improving corporate governance, optimizing internal management, and enhancing operational efficiency and risk control to ensure steady growth.

Key Personnel Attrition Risks

Core technical personnel are vital for competitiveness and innovation. Market talent competition is intense, with risks of key staff leaving. The company is strengthening salary, incentives, training, and recruitment to retain core talent.

Intellectual Property Infringement Risks

IP rights are core assets. Theft or infringement of patents, core technologies, or copyrights could weaken competitiveness. The company is enhancing IP protection, applying for patents and copyrights, and strengthening confidentiality measures to reduce this risk.

Executive Compensation Analysis

Chairman’s Pre-tax Remuneration

Chairman Wang Xindong received no pre-tax remuneration during the period, mainly earning from Shenzhen Innovation Investment Group Co., Ltd., the controlling shareholder, not from the company.

General Manager’s Pre-tax Remuneration

General Manager Ling Dongsheng received 2.8744 million yuan pre-tax, maintaining a high level, reflecting company incentives for key management.

Deputy General Managers’ Pre-tax Remuneration

Deputy General Manager Wang Mingyi received 1.7412 million yuan; Li Bin (also Secretary of the Board and CFO) received 1.6361 million yuan. Their compensation aligns with company performance and responsibilities.

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