Against the backdrop of current macroeconomic growth deceleration and the consumer market entering a "stock era," how enterprises can weather cycles and achieve high-quality growth has become a core proposition. HUITONGDA NET (09878) delivered a report card in the first half of 2025 that demonstrates resilience and transformation wisdom. This financial report not only showcases comprehensive improvements in core financial indicators but also reveals the company's value leap from "industrial internet" to "industry + AI," actively responding to the national strategy of "accelerating the construction of a unified national market" and further consolidating its leading position in the sinking market.

In the first half of 2025, the company's three profitability indicators all reached historical highs, with gross margin rising to 4.6%, operating profit growing 15.9% year-on-year, and net profit attributable to shareholders increasing 10.8%, demonstrating that the "quality improvement, efficiency enhancement, and innovative development" strategy has entered its harvest phase. Particularly noteworthy is that as of the end of June this year, the company's cash and wealth management products totaled over 7.8 billion yuan, with operating cash flow reaching 412 million yuan (RMB, same below), a significant 65.7% year-on-year increase, showing continued optimization of profitability quality and substantial improvement in operational efficiency.

This dramatically improved financial performance is not an endpoint but merely the beginning of HUITONGDA NET's strategic transformation achievements, laying a solid foundation for future high-quality growth. Additionally, with the advancement of full circulation, it will also help facilitate a swift return to Stock Connect.

**Self-Brand Business Achieves Rapid Growth, Supply Chain Capabilities Comprehensively Enhanced**

During the period, HUITONGDA NET's self-brand business achieved rapid development, with sales scale breaking through 80 million yuan, surging 490% year-on-year. Self-brand product gross margins exceeded 25%, significantly higher than traditional agency business, benefiting the improvement of company profitability quality.

This brings us to the company's "reverse + short-chain + digitalized" flexible supply chain system. Through upstream factory equity participation, streamlined circulation processes, and terminal service optimization, the company achieved an upgrade from "cost-effectiveness" to "quality-price ratio," effectively aligning with the policy orientation of "breaking small cycles and promoting dual circulation" in national unified market construction.

Taking Altisha air conditioning as an example, it took only one month from project initiation to first unit delivery. Currently, the second-phase factory focusing on commercial and export products has also entered production, significantly improving supply chain efficiency. The company has now built a diversified brand matrix across four industry categories: home appliances, alcohol, daily chemicals, and home furnishing, covering multiple brands including Thomson, Altisha, and Taohuatan, providing rich reserves for sustained growth and assisting national market integration development through standardized and scaled product and service systems.

Notably, in the much-watched "instant retail" new track, HUITONGDA NET has begun active and forward-looking strategic deployment. According to the "Instant Retail Industry Development Report" released by the Ministry of Commerce, with collaborative innovation among platforms, supermarkets, brand merchants, and small stores, instant retail will maintain vigorous development momentum. It is expected that by 2030, China's instant retail market size may exceed 2 trillion yuan.

Facing this trillion-yuan market, HUITONGDA NET responded promptly. Currently, the company has achieved comprehensive integration of store, product, order, and review management with platform capacity deployment through AI+SaaS empowerment, and has officially connected to major platforms including Taobao Flash Purchase (and Ele.me), Meituan, and Douyin, empowering multi-industry retail stores in sinking markets for instant retail order processing, local life order handling, and business growth.

This move not only effectively enhances terminal member stores' service capabilities and revenue flexibility but also establishes first-mover advantages for the company to capture the rapidly growing new consumption track of instant retail.

**AI Strategy Accelerates Implementation, Service Revenue Proportion Continues Rising**

Meanwhile, HUITONGDA NET's "AI + Industry" strategy achieved significant results during the reporting period. In the first half of 2025, the company's service revenue reached 312 million yuan, with AI-related revenue accounting for over 20%. AI-related revenue exceeded 60 million yuan, becoming a new growth pole. This is inseparable from the comprehensive deployment and application of the company's self-developed "Qiancheng Cloud AI" industry large model.

To date, the company has developed and deployed 24 AI Agents, comprehensively applied to member stores, upstream industry customers, and internal management. According to sampling statistics, member stores accessing AI tools improved operational efficiency by over 30% on average, with inventory turnover rates shortened by over 15%.

As the company comprehensively upgrades from "SaaS+" to "AI+," launching the "Qiancheng AI Super Store Manager," it has broken through industrial chain data circulation barriers, achieving a closed loop of "data-algorithm-decision," completing the upgrade from providing informatization tools to providing intelligent decision-making.

More remarkably, in August this year, the company reached comprehensive full-stack AI cooperation with Alibaba Cloud, further strengthening the company's technological advantages. With Qiancheng Cloud AI fully accessing Alibaba's Tongyi Qianwen large model, the company gained comprehensive support including R&D experts and computing resources, injecting powerful momentum for sustained rapid development of the company's AI business.

This cooperation not only enhances the company's digital competitiveness in smart retail, member operations, and smart supply chains but also lays a solid foundation for building a new "AI + Industry" ecosystem in sinking markets.

**Triple Barriers Build Moat, Competitive Advantages Continuously Strengthened**

The company's achievements are inseparable from the strong support of its "platform, technology, team" triple competitive barriers, which highly align with the unified national market's advocacy of "breaking bottlenecks and breakpoints, promoting industrial iteration and upgrading."

Specifically, HUITONGDA NET's platform barrier is essentially its online-offline integrated ecosystem. Using the company's "Qiancheng AI Super Store Manager" as the digital foundation, it connects the company's nationwide 251,000 member stores, achieving data accumulation and operational efficiency improvement. Combined with offline channel networks and supply chain short-chain direct connection capabilities, it forms a "offline network + online platform + supply chain" closed-loop ecosystem.

In terms of technology barriers, based on over ten years of accumulated rural consumption behavior data and store operation data, the company has built one of the few "Qiancheng Cloud AI" large models in China with township commercial scenario adaptation capabilities. This scenario-based data barrier and technological advantage set extremely high entry thresholds for new competitors.

From the team barrier perspective, the company possesses a composite team with both industrial insights and internet thinking, capable of diving deep into industrial hinterlands to solve practical pain points. Through deploying teams for on-site stationing and outputting professional operational management capabilities, it helps partners achieve digital transformation. This deep empowerment capability constitutes an important organizational advantage.

Additionally, this year, to continuously improve shareholder returns and strengthen market confidence, HUITONGDA NET implemented a series of strategic measures on the capital side, fully demonstrating the company's forward-looking vision and operational efficiency in capital planning and value management.

Based on firm confidence and value recognition of the company's future development, HUITONGDA NET announced a share buyback plan in June this year, planning to repurchase up to 500 million yuan worth of H shares in the open market over the next 12 months. Simultaneously, the company formally submitted an application to the China Securities Regulatory Commission in June this year, planning to convert 350 million domestic shares into H shares to achieve full circulation.

This move has profound strategic significance. On one hand, after full circulation implementation, the company's circulating share proportion and circulating market value will significantly increase. The total circulating H shares are expected to exceed 530 million shares, accounting for 94.21% of total share capital, potentially substantially improving daily trading volume and market depth, further enhancing investment attractiveness.

On the other hand, this measure will significantly optimize the company's shareholder structure, not only improving stock liquidity and market pricing efficiency but also attracting attention from more international medium and long-term institutional investors, laying a solid foundation for HUITONGDA NET to expand diversified capital channels and strengthen international market reputation.

**Comprehensive Outlook**

Overall, HUITONGDA NET is evolving from an industrial internet platform to an "AI + Industry" ecosystem, with three profitability indicators reaching new highs proving significant strategic effectiveness. Rapid growth in self-brand business and fast rise of AI business provide dual growth momentum for the company.

The company's constructed platform, technology, and team triple barriers form a deep moat, maintaining leading advantages in sinking market competition. Looking toward long-term development, the company has planned clear development paths and definite strategic directions.

On the supply chain side, the company will focus on new consumption trend tracks such as hard discount and instant retail, strengthen self-brand operations and production-sales integration capabilities, while accelerating development of online channels and cross-border export channel construction, actively participating in domestic and international dual circulation.

In AI business, the company continues deepening comprehensive cooperation with Alibaba Cloud, with AI-related revenue expected to maintain rapid growth. Notably, the company adheres to a "industrial development + capital operation" dual-wheel drive strategy and will actively promote acquisitions of quality enterprises, focusing on "supply chain-type, channel network-type, AI-type" targets.

Simultaneously, the company plans to complete capital reserve compensation for losses according to relevant policy guidance, creating dividend conditions for shareholders, which is expected to further enhance shareholder returns.

HUITONGDA NET, through continuous deepening of its "Industry + AI" strategy, steady improvement in profitability, and forward-looking capital deployment, demonstrates exceptional adaptability and growth potential in complex market environments. Currently, the company's strategic transformation has entered its harvest phase, with rapid development of self-brand business and AI business providing dual growth momentum.

With continuous expansion of new businesses and ongoing enhancement of technological capabilities, the company is accelerating into a new round of high-quality growth period with continuously optimizing fundamentals. Meanwhile, with full circulation implementation, it can not only increase the potential investor base and attract overseas investor purchases to diversify shareholder structure but also facilitate swift return to Stock Connect, opening higher stock price appreciation space.

Current valuations have not fully reflected the company's transformation effectiveness and long-term potential, deserving focused market attention.