Ming Yuan Cloud (00909) saw its share price drop more than 6% during trading on Thursday. As of the time of writing, the stock was down 6.17% at HK$1.14, with a trading turnover of approximately HK$21.87 million.

On the news front, the company recently released its interim results for 2026. Revenue for the period stood at RMB 525 million, representing a year-on-year decrease of 13.3%. Gross profit amounted to RMB 416 million, down 14.4% year-on-year. During the period, the company recorded a net profit of just RMB 503,000, a sharp decline of 96.3% compared with the prior year period. Adjusted net profit came in at RMB 12.88 million, down 61.1% year-on-year.

During the reporting period, the company's cloud service revenue was RMB 451 million, a year-on-year decline of 14.1%, accounting for 85.8% of total revenue (compared with 86.6% in the corresponding period of 2025). The decline in cloud service revenue is primarily attributed to the fact that the industry's bottoming-out and recovery process has not yet been completed, leading to a contraction in new contract signing. Additionally, the impact of the decline in historical contracts signed on deferred revenue is gradually being reflected, placing pressure on overall revenue.

A research report from Everbright Securities noted that in the first half of 2026, Ming Yuan Cloud's sales and promotion expenses, general and administrative expenses, and research and development expenses decreased by 20.2%, 13.7%, and 15.7% year-on-year respectively, which helped narrow the operating loss by 20.6% year-on-year to RMB 52 million. The brokerage believes that the continuous improvement of the AI product system, along with cost reduction and efficiency enhancement, has driven the narrowing of operating losses.

Given that the recovery of real estate demand will take time, Everbright Securities has lowered its revenue forecasts for Ming Yuan Cloud for 2026 and 2027 to RMB 1.16 billion and RMB 1.06 billion respectively (representing -7% and -15% compared with previous projections), while introducing a new revenue forecast of RMB 1.02 billion for 2028. The firm maintains its "Overweight" rating on the stock.