Baiwang Co. released its unaudited interim results for the six months ended 30 June 2026, swinging to a net loss amid weaker RegTech sales and elevated R&D spending tied to its artificial-intelligence transition.
Revenue and Profitability • Revenue fell 14.4% year on year to RMB297.54 million, driven mainly by a drop in large, custom RegTech projects after the full rollout of the 2024 “Leqi” system. • Gross profit slipped 20.4% to RMB128.87 million; gross margin narrowed to 43.3% from 46.6%. • The company posted a net loss of RMB43.82 million versus a RMB3.65 million profit a year earlier. On a non-IFRS basis, Baiwang recorded an adjusted net loss of RMB39.70 million, compared with an adjusted profit of RMB4.60 million in H1 2025. • Basic and diluted loss per share stood at RMB0.19 (H1 2025: earnings of RMB0.02).
Segment Performance • RegTech revenue declined 15.5% to RMB205.08 million, representing 68.9% of total sales. • FinTech revenue edged up 1.4% to RMB68.66 million, accounting for 23.1% of revenue. • CreditTech, launched during the period, generated RMB6.52 million, or 2.2% of group revenue. • Revenue from Other Services contracted 53.4% to RMB17.28 million following a strategic scale-back of low-margin precision-marketing activities.
Cost Structure • Cost of sales contracted 9.1% to RMB168.67 million, but outpaced the fall in revenue, compressing margins. • Research and development expenses rose 18.4% to RMB80.83 million as Baiwang accelerated investment in its TaxSwift cross-border tax-compliance platform and AI capabilities. • Administrative expenses increased 12.8% to RMB50.49 million, reflecting one-off costs from organisational restructuring. • Selling and distribution expenses fell 6.4% to RMB46.09 million after a shift from offline to digital customer-acquisition channels.
Balance Sheet and Liquidity • Cash and cash equivalents declined to RMB297.68 million from RMB385.68 million at end-2025, mainly funding working-capital needs. • Total current assets were RMB723.95 million against current liabilities of RMB184.58 million, maintaining a healthy current ratio of 3.9. • Lease liabilities reduced to RMB8.19 million, while the company secured new bank credit lines totalling RMB200 million, with RMB47.50 million drawn as of the announcement date. • Capital expenditure reached RMB11.70 million, largely for internally developed intangible assets; capital commitments stood at RMB21.60 million.
Strategic Initiatives Management reaffirmed “Strategy 3.0,” prioritising an AI-centric overhaul across fiscal-tax AI agents, commercial credit analytics and global e-invoicing via the TaxSwift platform. Resources are being reallocated toward high-value AI products, data capabilities and overseas compliance services, while lower-margin activities are being reduced.
Outlook Baiwang plans to complete deployment of net IPO proceeds—HKD228.90 million—by end-2029 across product upgrades, R&D, marketing, acquisitions and working capital. No interim dividend was declared for H1 2026.
Governance and Other Matters The Audit Committee reviewed the interim results, and independent auditor Rongcheng (Hong Kong) CPA Limited performed a limited review. The company confirmed adherence to Hong Kong’s Corporate Governance Code, with the exception of combining chairperson and CEO roles. Public float requirements were met, and no material post-period events, share buy-backs or significant litigation were reported.