During the 2020 SaaS capital boom, MING YUAN CLOUD (ticker: 0909.HK) debuted on the Hong Kong Stock Exchange as a star in the real estate digitalization sector. At its initial public offering, the company's market value surged to nearly 70 billion Hong Kong dollars. However, in less than six years, the stock price has experienced a dramatic collapse, with the latest market capitalization dropping below 3 billion Hong Kong dollars, a decline of over 96% from its historical peak. This persistent price decline is driven by years of consecutive revenue decreases due to the deep adjustment in the real estate industry, coupled with growth challenges for the SaaS business model in a shrinking market. On July 30, the company issued a profit warning, forecasting a sharp year-on-year drop in first-half net profit. Management attributed this to non-business factors like interest rates and exchange rates, but the market remains skeptical given the profit swing from 13.75 million yuan last year to less than 1.5 million yuan this year. With the upcoming semi-annual review of the Hang Seng Index, the company's current market value has fallen below the threshold for Hong Kong Stock Connect eligibility, making the index adjustment outcome a key focus for investors.
Peak at Listing: A Real Estate Digital Leader in the SaaS Boom
On September 25, 2020, MING YUAN CLOUD listed at an IPO price of 16.5 Hong Kong dollars, surging 86% on its first day. At that time, the SaaS concept was at its zenith, and the real estate industry was still near its peak. Backed by six major cornerstone investors, including Hillhouse, Sequoia, and BlackRock, the market valued this software company, with annual revenue of just 1.7 billion yuan, at a price-to-sales ratio exceeding 55 times. In February 2021, the stock hit an all-time high of 60.717 Hong Kong dollars, pushing its market cap to 119.5 billion Hong Kong dollars. The domestic SaaS industry was riding a wave of capital enthusiasm, with narratives around cloud computing and enterprise digital transformation fully priced in. As a leading real estate SaaS provider in China, with high market share in areas like property marketing, engineering, and cost management, MING YUAN CLOUD was seen as a rare asset with both industry barriers and growth potential. But this golden period did not last. Starting in the second half of 2021, as the real estate sector entered a deep adjustment, developers slashed capital spending and IT budgets, directly hitting MING YUAN CLOUD's core business. The stock price began a prolonged decline. As of the close on July 31, 2026, the stock was trading at just 1.33 Hong Kong dollars, corresponding to a total market value of approximately 2.54 billion Hong Kong dollars. The company's financial performance also shows a continuous downward trend. Revenue peaked at 2.184 billion yuan in 2021, then fell year after year to 1.816 billion yuan in 2022, 1.640 billion yuan in 2023, 1.435 billion yuan in 2024, and further dropped to 1.284 billion yuan in 2025, nearly halving revenue over five years. In terms of net profit, the company suffered losses for four consecutive years from 2021 to 2024, with a loss of 1.154 billion yuan in 2022. While it turned profitable in 2025 with a net profit of 31 million yuan, its non-recurring net profit was still negative at -2 million yuan, indicating that core business profitability has not yet truly recovered.
Profit Warning: From 13.75 Million to Under 1.5 Million, How Much is Due to Forex Factors?
On July 30, MING YUAN CLOUD issued a profit warning announcement, forecasting that net profit attributable to owners of the company for the six months ending June 30, 2026, would be no more than 1.5 million yuan. This compares to approximately 13.75 million yuan in the same period last year, representing a drop of nearly 90%. The company attributed the entire profit decline to external macroeconomic conditions and non-core business factors. First, the dollar market interest rate decreased year-on-year, reducing the financial income from the company's U.S. dollar-denominated time deposits, thus lowering the financial return on cash assets. Second, the appreciation rate of the U.S. dollar against the Hong Kong dollar narrowed compared to the same period last year, leading to lower exchange gains. The announcement stressed that these factors stem from normal fluctuations in global exchange and interest rate markets, not from the company's core business operations. However, the market has questions about this explanation. Moving from 13.75 million yuan to less than 1.5 million yuan, a net profit decline of over 12 million yuan, if entirely caused by lower financial income and exchange gains, suggests the company's profits are highly dependent on financial asset returns rather than core operations. In the first half of 2025, the company's adjusted net profit was 33.119 million yuan, with financial income and exchange gains contributing a significant portion, while the profitability of the core business itself was already relatively weak. Once the benefits from interest rates and exchange rates fade, profit elasticity is directly exposed. Notably, in the first half of 2025, the company's revenue fell 15.9% year-on-year to 606 million yuan, and its operating loss was still 65.58 million yuan. The ability to turn net profit positive relied heavily on non-operating income like financial income and exchange gains. In other words, in MING YUAN CLOUD's current profit structure, non-operating income holds significant weight, while the core business's cash-generating ability has not yet fully recovered. The profit volatility caused by exchange rate and interest rate fluctuations essentially reflects the company's high dependence on the external financial environment, a factor that cannot be simply dismissed as a "non-business factor."
Index Review Approaching, Market Cap Under Pressure, Risk of Being Removed from Stock Connect
Another practical issue arising from the falling stock price is the pressure to maintain eligibility for the Hong Kong Stock Connect. CICC released a report predicting that in the August semi-annual review of the Hang Seng Composite Index, MING YUAN CLOUD will be removed from the Stock Connect due to its market capitalization coverage ranking falling below 96%. If the company no longer meets the inclusion criteria for the Stock Connect after the September index adjustment, the southbound trading channel will close. For MING YUAN CLOUD, which already has low daily trading volume, this would further shrink liquidity and potentially push its valuation even lower. From a company perspective, facing the shrinking market cap, MING YUAN CLOUD has not launched large-scale buybacks or shareholder share purchases to stabilize the stock. The significant valuation correction of MING YUAN CLOUD is a typical example of the plight of vertical SaaS enterprises during the real estate downturn. As a software service provider tied to the real estate industry, MING YUAN CLOUD's primary customers are developers. The industry's health directly determines the ceiling for its revenue growth. The deep adjustment of the real estate sector since 2021, with declines in new construction starts and sales volumes, has led to sharp cuts in developer IT budgets, directly causing the company's consecutive years of revenue decline. To counter the sluggish growth of its core real estate business, the company has actively expanded into a second growth curve in recent years, including AI products, asset management and operations, and overseas markets. However, these new businesses are still small in scale and cannot offset the decline in the real estate business, nor can they become new growth pillars in the short term. Changes in employee numbers also reflect the company's contraction strategy: the total number of employees was 4,247 in 2021, but had fallen to 1,663 by the end of 2025, indicating a workforce reduction of over 60% over four years to maintain the income statement through cost-cutting and efficiency gains. For MING YUAN CLOUD, the short term involves the dual pressures of profit decline and index review, while the medium to long term requires answering the growth question for real estate SaaS in an era of a shrinking market. Against the backdrop of the real estate industry shifting from incremental development to stock operations, the company's ability to successfully transform from "serving developers" to "serving asset operations" and to find new product growth points in the AI wave will determine whether it can move out of its current valuation trough.
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