In-depth Profitability Quality Assessment Report for Huasheng Tiancheng (600410)

Now I have complete information, let me present the comprehensive profitability quality assessment report for Huasheng Tiancheng.

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Based on 2024 annual report data,

, rather than the 83.31% mentioned by the user. This figure indicates that the company’s net profit is entirely supported by non-recurring gains and losses, while its main business is actually in a loss-making state.

Indicator	Amount	Description
Operating Revenue	4.271 billion yuan	+2.57% YoY
Operating Profit	71.94 million yuan	Main business profit margin only 1.68%
Net Profit	24.12 million yuan	Returned to profit from loss
Non-Recurring Gains and Losses	51.22 million yuan	Mainly from investment income and fair value changes
Net Profit After Deducting Non-Recurring Gains and Losses	-27.1 million yuan	Main business in loss

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According to the annual report disclosure, the breakdown of 2024 non-recurring gains and losses is as follows:

Item	Amount (10,000 yuan)	Proportion of Non-Recurring Gains and Losses
Fair Value Change Gains and Losses (Stock Investments)	38.84	75.83%
Government Subsidies Included in Current Period Profits and Losses	28.92	56.46%
Other Non-Operating Income and Expenses	10.77	21.03%
Gains and Losses from Asset Disposals	2.71	5.29%
Impact of Income Tax	-11.66	-22.76%
Impact of Minority Shareholders’ Equity	6.21	12.12%
Total	51.22	100%

1. Fair value change gains and losses are the largest contributor
   , accounting for 75.83%, mainly from the stock price increase of Telink Semiconductor (688591) held by the company
2. Government subsidies account for 56.46%
   , reflecting the company’s high dependence on subsidies
3. After deducting income tax and the impact of minority shareholders’ equity, the net non-recurring gains and losses amount to 51.22 million yuan

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Comprehensive assessment is based on the following three dimensions:

Assessment Dimension	Scoring Criteria	Huasheng Tiancheng’s Score
Proportion of Non-Recurring Gains and Losses	<10% = 4 points, <30% = 3 points, <50% = 2 points, <100% = 1 point	0 points (212% > 100%)
Net Profit After Deducting Non-Recurring Gains and Losses	>0 = 3 points, <0 = 0 points	0 points (Loss of 27.1 million yuan)
Net Profit Margin	>3% = 2 points, <3% = 1 point	1 point (0.56%)
Overall Score	Full score 10 points	1/10 points

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Year	Net Profit After Deducting Non-Recurring Gains and Losses (10,000 yuan)	Proportion of Non-Recurring Gains and Losses	Score	Rating
2020	85.00	35.36%	7 points	🟡 Good
2021	12.00	48.06%	6 points	🟡 Good
2022	-350.00	8.18%	6 points	🟡 Good
2023	-250.00	13.24%	5 points	🔴 Poor
2024	-27.10	212.33%	1 point	🔴 Poor

• Continuous Deterioration
  : The profitability quality score dropped from 7 points in 2020 to 1 point in 2024
• Net profit after deducting non-recurring gains and losses was in loss for 4 out of 5 consecutive years
  : Only barely positive in 2021
• 2024 saw a record high proportion of non-recurring gains and losses
  : A significant deterioration from 13.24% in 2023

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• Operating profit margin is only
  1.68%
  , which is at a low level in the software industry
• Gross margin of cloud computing products dropped from 28.73% in 2020 to 21.01% in 2024
• Gross margin of IT solutions business is only 9.62%

• The company holds 7.42% equity (17.86 million shares) of Telink Semiconductor
• Fluctuations in Telink Semiconductor’s stock price directly determine Huasheng Tiancheng’s profit performance
• Fair value change gains are expected to be 200-250 million yuan in H1 2025, but net profit after deducting non-recurring gains and losses still remains in a loss of 65-95 million yuan

• Unrealized gains from Telink Semiconductor’s stock price increase are not sustainable
• The company maintains 900-1000 million yuan of trading financial assets all year round, leading to high risk of profit fluctuations
• Once the stock price pulls back, performance will drop significantly

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Regarding the “83.31%” you mentioned, search results indicate that it may refer to:

1. Net profit after deducting non-recurring gains and losses in H1 2025 was -83.31 million yuan
   : The loss narrowed compared to -271 million yuan in the same period of 2024
2. Net profit after deducting non-recurring gains and losses improved by 83.31% YoY
   : In terms of absolute value, the loss magnitude is indeed decreasing

Indicator	Amount	YoY Change
Operating Revenue	3.172 billion yuan	+6.54%
Net Profit Attributable to Parent Company	358 million yuan	+267.43%
Net Profit After Deducting Non-Recurring Gains and Losses	Approximately 50 million yuan (Q3 single quarter)	Significant improvement

: The company achieved a net profit after deducting non-recurring gains and losses of 50.03 million yuan in Q3 2025, indicating the start of improvement in the profitability of its main business.

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1. ⚠️
   Profitability of main business is still unstable
   : Although net profit after deducting non-recurring gains and losses turned positive in Q3 2025, its sustainability remains to be seen
2. ⚠️
   Overvaluation
   : Current P/E ratio is 44.89x, P/B ratio is 5.65x, and the stock price has already factored in expectations
3. ⚠️
   High dependence on investment income
   : Poor profit quality with high risk of performance fluctuations

1. ✅
   Layout of AI computing power business has achieved results
   , with in-depth cooperation with Huawei Ascend ecosystem
2. ✅
   Spun off U.S. cloud computing company GDI for listing on Nasdaq
   , with a valuation of US$398 million
3. ✅
   IPOs of invested enterprises such as Telink Semiconductor and Bosichuang have brought capital appreciation

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[0] Jinling AI Financial Database - Huasheng Tiancheng (600410.SS) Financial Data
[1] 2024 Annual Report of Beijing Huasheng Tiancheng Technology Co., Ltd. (https://file.finance.qq.com/finance/hs/pdf/2025/04/26/1223324852.PDF)
[2] Eastmoney - Huasheng Tiancheng H1 2025 Profit Forecast Announcement (https://finance.eastmoney.com/a/202507143456354894.html)
[3] Caifuhao - Dual-Driven by Computing Power + Ecosystem, Huasheng Tiancheng Faces New Opportunity for Valuation Reassessment (https://caifuhao.eastmoney.com/news/20260112233144807447190)
[4] Tiger Finance - Behind Huasheng Tiancheng’s 137% Surge in One Month (http://m.laohucaijing.com/News/149582/)
[5] Sina Finance - Huasheng Tiancheng Financial Indicators (https://vip.stock.finance.sina.com.cn/corp/go.php/vFD_FinancialGuideLine/stockid/600410/displaytype/4.phtml)