China National Software & Service Company (600536) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was RMB 640.50 million, down 8.85% year-over-year; net loss attributable to shareholders narrowed by 27.20% to RMB -80.62 million.

• Operating cash flow remained negative at RMB -731.60 million, but improved 16.55% year-over-year.

• Basic and diluted EPS were both -0.10, an improvement from -0.13 in Q1 2024.

Financial highlights

• Gross margin remained stable as cost of revenue was RMB 299.69 million versus RMB 296.91 million last year.

• R&D expenses dropped 44.43% due to exclusion of ChinaSoft System from consolidation.

• Net assets attributable to shareholders decreased 3.76% from year-end 2024.

• Total assets at quarter-end were RMB 8.40 billion, down 1.70% from year-end.

• Cash and cash equivalents at quarter-end were RMB 2.38 billion.

Outlook and guidance

• Company continues to focus on core business and cost reduction to improve profitability.

• Ongoing review of a private placement to raise up to RMB 2 billion is under regulatory review.