Dawning Information Industry Co.,Ltd. demonstrated steady growth in its full-year 2025 performance, with accelerated implementation of its strategic focus on AI computing power.
According to the company's 2025 annual report, it achieved operating revenue of 149.64 billion yuan, a year-on-year increase of 13.81%. Net profit attributable to shareholders reached 21.76 billion yuan, up 13.87% from the previous year. The board of directors also proposed a profit distribution plan for 2025, with total cash dividends amounting to 6.58 billion yuan, representing 30.24% of the net profit attributable to shareholders.
On the financing front, the company announced in February 2025 its plan to issue 8 billion yuan in convertible bonds to unspecified investors. The raised funds will be primarily allocated to three key projects: advanced computing cluster systems for artificial intelligence, next-generation high-performance AI training and inference integrated appliances, and localized advanced storage systems, directly targeting the core sector of computing infrastructure.
Regarding mergers and acquisitions, the annual report disclosed that the company terminated a significant asset restructuring plan on December 9, 2025. This plan involved a proposed stock swap merger with Hygon Information Technology Co., Ltd. and a subsequent fundraising effort. The company stated that the transaction conditions were not yet mature and that the market environment had changed significantly since the initial planning phase, leading to the termination decision based on prudent considerations.
**Core Profitability Recovery: Decline in Non-Recurring Gains Highlights Growth in Core Earnings**
In 2025, the company's operating revenue was 149.64 billion yuan, up 13.81% year-on-year. Net profit attributable to shareholders was 21.76 billion yuan, an increase of 13.87%. Stripping out non-recurring items, the core net profit attributable to shareholders was 18.38 billion yuan, surging 33.97% compared to the previous year.
The disparity in the growth rates of the two profit metrics stemmed from a substantial reduction in non-recurring gains and losses. Total non-recurring items amounted to approximately 3.39 billion yuan in 2025, down by about 2 billion yuan from the roughly 5.39 billion yuan recorded in 2024. This decrease was primarily due to a reduction in government grants recognized in current profits, which fell from about 5.29 billion yuan to approximately 2.69 billion yuan.
Against the backdrop of shrinking non-recurring income, the contribution from core business profits saw a significant increase, indicating a substantial improvement in the quality of earnings from primary operations.
Investment income from associates was another key support for the period's performance. The profit from associates recognized under the equity method in the consolidated financial statements was approximately 6.84 billion yuan, a 21.2% year-on-year increase. Hygon Information Technology contributed 7.11 billion yuan, while losses from other associated enterprises partially offset the total gains.
**$1.1 Billion Convertible Bond Targets AI Computing; Liquid Cooling Business Expands Globally**
Throughout 2025, the company continued to advance its business upgrades centered on an integrated business model of "hardware + platform + service + operations."
In the computing power sector, it launched the scaleX640 single-cabinet super-node product and a 10,000-card super-cluster system. By February 2026, these were simultaneously deployed and operational at core nodes of the National Supercomputing Internet. In October 2025, the company released OneScience, described as China's first integrated development platform for scientific large models, which has already provided support services to research institutions such as the Institute of Atmospheric Physics.
In February 2026, the company's board of directors reviewed and passed a plan to issue 8 billion yuan in convertible bonds. The proceeds are earmarked for the three aforementioned projects: advanced AI computing clusters, next-gen AI integrated appliances, and localized advanced storage systems. This plan still requires approval from the shareholders' meeting and must undergo review by the Shanghai Stock Exchange and registration with the China Securities Regulatory Commission before implementation.
In the liquid cooling business, its subsidiary, Dawning Number Creation, maintained a leading market share domestically and began expanding into Southeast Asia, starting with Singapore where it established a wholly-owned subsidiary. In June 2025, Dawning Number Creation launched the C7000-F phase-change cold plate liquid cooling solution, which the company claims offers a more than 15% improvement in cooling capacity compared to the previous generation.
**Significant Growth in Software and Service Revenue; High Customer Concentration**
Analyzing the product structure, revenue from IT equipment reached 125.03 billion yuan, a year-on-year increase of 6.81%, with a gross margin of 27.31%, remaining largely stable compared to the previous year.
Revenue from software development, system integration, and technical services surged to 24.46 billion yuan, a substantial 75.34% year-on-year increase. The gross margin for this segment was 47.25%, up 3.53 percentage points from the previous year. This growth was primarily driven by a significant rise in revenue from data center, cloud computing, and custom development services, which also contributed to an improvement in the overall gross margin.
In terms of customer structure, the total sales to the top five customers amounted to 123.53 billion yuan, accounting for 82.56% of the annual total sales, indicating a high degree of customer concentration. Notably, the top two customers were new additions. The largest customer contributed 28.97 billion yuan in revenue, representing 19.36% of the total.
Regarding R&D investment, expenses in 2025 were 16.71 billion yuan, a 29.33% year-on-year increase, accounting for 10.95% of the operating revenue. A significant portion of this growth was in materials and processing fees, directly linked to increased R&D investment in new computing power products like super-nodes and super-clusters.
**Operating Cash Flow Drops Over 50%; Company Attributes it to Treasury Management**
Net cash flow from operating activities decreased to 13.13 billion yuan from 27.22 billion yuan in 2024, a decline of 51.75%, which drew investor attention.
The company provided two specific explanations for this: Firstly, a large payment for an entrusted development project was received in the previous year, and corresponding payments were made in the current period based on the development progress, leading to an increase in cash outflow. Secondly, during the period, the company purchased large-denomination certificates of deposit to optimize capital allocation and enhance returns on idle funds, which resulted in an outflow under operating activities.
The company stated that these matters were part of normal business operations and treasury management activities and did not indicate any significant adverse change in the operational condition of its core business.
Changes in the balance sheet corroborate this: Other current assets increased from 8.21 billion yuan to 20.47 billion yuan, and non-current assets due within one year rose from 1.05 billion yuan to 33.03 billion yuan, primarily related to the purchase and maturity structure of the large-denomination certificates of deposit.
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