Chutian Dragon Co.,Ltd. (SZ003040, share price 15.48 yuan, market cap 7.138 billion yuan) disclosed its 2026 semi-annual report and an announcement regarding the termination of its 2026 private placement of A-shares on the evening of August 25, after a three-day surge in its stock price. The half-year report reveals a year-on-year decline in operating revenue and an expanded net loss attributable to shareholders. Concurrently, the company announced its decision to halt the planned 2026 targeted issuance of A-shares.
According to the semi-annual report, Chutian Dragon recorded operating revenue of 319 million yuan in the first half of the year, a 30.21% decrease year-on-year. The net loss attributable to shareholders stood at -62.1242 million yuan, compared to -39.7688 million yuan in the same period last year, with the loss widening by 56.21%. The non-GAAP net loss reached -65.685 million yuan, expanding by 58.93% year-on-year. Basic earnings per share were -0.13 yuan.
In the report, the company attributed the performance decline to dual operational pressures on both the supply and demand sides. On the demand front, intensified market competition led to lower prices and volumes for certain embedded security products, driving the revenue drop. On the supply side, rising global semiconductor raw material costs and escalating expenses in wafer fabrication, packaging, and testing made it difficult for the company to pass on price reductions to upstream chip suppliers. Consequently, the decrease in operating costs lagged behind the decline in revenue, compressing the overall gross margin.
By product category, embedded security products remained the company's primary revenue source, generating 264 million yuan in the first half, accounting for 82.72% of total revenue, down 28.45% year-on-year. Intelligent hardware contributed 21.0896 million yuan, a 53.20% decrease, while software and services brought in 9.1225 million yuan, down 72.47% year-on-year.
Despite the financial strain, the semi-annual report highlighted several milestones: the company won bids for head-office level projects from multiple state-owned and joint-stock commercial banks, secured contracts for third-generation social security card programs in various cities, received certifications for core self-developed technologies such as eSIM from domestic and international industry bodies and clients, and established a Singapore subsidiary to expand overseas markets. As of the reporting period, the company and its subsidiaries held 162 patents and 444 software copyrights. The company has decided against distributing cash dividends, issuing bonus shares, or converting capital reserves into share capital.
In a separate announcement released the same day, Chutian Dragon stated that its third board of directors meeting, held on August 24, 2026, approved the resolution to terminate the 2026 targeted issuance of A-shares. The company had initially approved the relevant proposals at a board meeting on February 9, 2026, disclosed the plan on February 11, 2026, and received shareholder authorization at an extraordinary general meeting on February 26, 2026.
Regarding the termination, the company explained that after initiating the issuance process, the board and management, along with relevant parties, actively advanced preparatory work. Following in-depth discussions with the sponsor and other intermediaries, and after comprehensive consideration of the company's future development plans, the decision was made to halt the issuance. The company emphasized that current production and operations continue normally, and the termination will not have a significant adverse impact on daily business activities, nor will it harm the interests of the company or its shareholders, particularly minority shareholders. Independent directors concurred that the decision was made with the company's long-term development in mind and will not materially affect its operations or sustainable growth.
Chutian Dragon specializes in comprehensive digital security and smart services solutions, operating across digital security, smart government, financial benefits, social security, smart transportation, and mobile communications. Its product portfolio includes embedded security products, intelligent hardware, and software and services.
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