Dismantling Bairong Yunchuang (06608)'s latest profit warning: AI hard investment with a double loss of gross profit

The Zhitong Finance App learned that Bairong Yunchuang (06608) issued a profit warning on the evening of July 28, predicting that the net loss for the first half of 2026 would be between RMB 320 million and RMB 360 million, compared with net profit of 201 million yuan to change from profit to loss in the first half of 2025. Opening the original text of this announcement, the key to financial interpretation is not the loss figures themselves, but the accounting components of losses.

I. Three structural sources of loss

According to the attribution of changes disclosed in the Financial Alert announcement, this round of losses is the result of simultaneous efforts on the three dimensions of revenue side, gross profit side, and cost side:

First dimension: revenue side — Some mature businesses have experienced a sharp decline in revenue. This is the most immediate impact in the short term.

Second dimension: gross profit side - The announcement clearly stated: “Due to the decline in revenue and share of mature businesses with relatively high gross margins, the Group's gross profit declined during the reporting period compared to the same period last year.” This means that not only has revenue decreased, but also the portion of revenue that has a relatively higher gross margin — which is even more impactful on profits.

The third dimension: the cost side - this is the part most worthy of attention from a financial perspective:

“Despite a sharp year-on-year decline in sales expenses, the Group continued to increase R&D investment in the field of artificial intelligence, and overall costs only declined slightly.”

Translated into financial language, it means that the revenue side experienced a sharp impact, but the cost side did not drop in equal proportion — because the company chose to continue to invest more in AI R&D.

This is the most central accounting explanation for this loss — it's not that the company's operations got out of control, but rather that management actively chose to continue investing in the future during a period of revenue pressure.

2. Seemingly “cost rigidity” is actually a “strategic choice”

Under the traditional financial analysis framework, expenses should fall simultaneously during the revenue downturn — this is the basic principle of “variable cost management.”

However, Bairong's financial philosophy is different:

• Sales expenses - Significant year-on-year decline due to business adjustments (indicating that the company did not expand in a disorderly manner on the sales side)

• R&D expenses — bucking the trend and continuing to rise (indicating that the company is not sacrificing long-term capabilities for short-term profits on the technical side)

This dual-track management of “reduced sales costs+increased R&D expenses” reflects a strategic reallocation of resources: it does not pursue optimal short-term profits, but pursues the deepest long-term technological moat.

The IPG announcement uses a key statement:

“The Group is releasing mature business resources (including communication lines, computing power, etc.) in an orderly manner and maintaining a prudent pace of investment in new businesses.”

From a financial point of view, this sentence needs to be split into two layers:

The first level — “orderly release of mature business resources” — indicates that the company is actively compressing investment in mature business resources that can no longer see growth, including specific technical infrastructure such as communication lines and computing power. This is a sign of active cost reduction.

The second level — “maintaining a prudent pace of investment in new business” — indicates that investment in AICC's new business is a disciplinary expansion, not aggressive money-burning. This is a sign of disciplined investment.

The gap between revenue and release reflects management's discipline in implementing the strategy — the revenue side can decline in the short term, but technology assets cannot shrink due to short-term performance pressure.

3. A highlight behind the “transformation of profit to loss”: AICC's new business has grown dramatically

If you only read the first half of the IRC, this is a complete “unsightly report” — but if you read the second part of the announcement, you'll find a hedging signal:

“During the reporting period, revenue from new businesses based on the AICC (Intelligent Communications) technology exhibition industry (i.e. 'AICC business'), which were not affected by the above, increased significantly year-on-year. Among them, new businesses serving customers in new scenarios showed significant growth, demonstrating the Group's ability to implement AICC technology in new scenarios.”

The financial value of this passage is that it provides preliminary evidence of a relay of performance. And developments after the reporting period have further strengthened this signal:

“After the reporting period, the Group's cross-scenario customer expansion continued to progress. Recently, we have achieved substantial implementation as a benchmark customer in new scenarios such as logistics.”

Benchmark customer landing in the logistics scene — This is the first time that the company has reached an AICC (AI Intelligent Communication) silicon-based employee implementation with a leading express delivery company.

Why are customers in the logistics industry an important signal? From a financial point of view, there are three values:

• Strong payment capacity for logistics customers — leading express delivery companies have huge annual revenue, large customer service center seats, and huge labor costs;

• Strong demand from logistics customers — express inquiries, delivery notifications, address changes, complaint feedback, etc. are needed all year round and will not disappear;

• Strong word-of-mouth effect from logistics customers - the launch of a logistics company is likely to accelerate the follow-up of other customers in the same industry.

4. Financial health: loss does not equal crisis

For a company that has recorded phased losses, the biggest concern from a financial perspective is: will this loss turn into a liquidity crisis?

The answer to the IRG announcement is clear:

“The Group's current cash reserves are relatively stable and there are no interest-bearing liabilities... The current cash reserves are sufficient to support ongoing operating needs.”

This “loss-making but abundant cash and no debt” financial structure gives management a time window to continue implementing the AI strategy — cash flow is sufficient to support AI R&D investment and new business expansion, rather than being forced to choose short-term profit operations during a period of revenue pressure.

5. Conclusions from a financial perspective

To dismantle this profit warning, there are a few key points of financial interpretation that investors need to remember:

First — this is a “loss due to strategic choices”, not a “loss due to uncontrolled operations” — at the same time, the company chose to continue to invest more in AI.

Second — AICC's new business revenue increased dramatically during the same period — indicating that the AI technology assets the company chose to continue investing in have already recorded initial monetization in the new scenario client.

Third — the actual implementation of a benchmark customer in the logistics scenario — shows that the industry-level reuse capability of AICC technology has been initially verified, providing the first implementation support for future performance relay.

Fourth — Stable cash reserves — indicates that management has sufficient time window to implement AI strategies and will not be forced to adjust the pace due to short-term performance pressure.

What really determines Bairong's future trend is not how much it lost in the current period — but whether Bairong AICC's business can expand its “benchmark customer base” in the future to achieve a large-scale effect of the new business.

*The content of this article is based on the profit warning announcement of Bairong Yunchuang (06608) of July 28, 2026 and the compilation of public information; it does not constitute any investment advice.