GRG Banking's Performance Growth Stalls: Gross Profit Margin Continues to Be Under Pressure, Transformation Costs Remain High, and Net Profit Attributable to Parent Declines for Two Consecutive Quarters

Securities Star Liu Haohao

Although revenue has surpassed 12 billion yuan for the first time, Guangdian Yuntong (002152.SZ) still shows relatively weak performance growth. The company’s recent earnings report indicates that the net profit after deducting non-recurring gains and losses for 2025 is growing by less than 4%, and net profit attributable to the parent has decreased by nearly 7% year-on-year, marking the second consecutive year of decline.

Securities Star notes that in recent years, Guangdian Yuntong’s revenue has continued to grow. In 2024, revenue increased by 60% compared to the 2021 peak during the performance cycle. However, the company’s net profit after deducting non-recurring gains and losses has almost “stagnated” since 2021. Behind this, to seize opportunities in the digital economy, the company has vigorously implemented a “dual-wheel drive” strategy of “industry + capital” in recent years. While expanding its business footprint, this has also led to rapid increases in costs and expenses, severely eroding profits. Additionally, due to intensified competition in traditional core markets and the drag of low-margin newly acquired businesses, Guangdian Yuntong’s overall gross profit margin has been declining steadily in recent years. Against this backdrop, the company in 2025 is focusing on the implementation of the “AI in all” strategy, accelerating the digital transformation of its financial technology and urban smart sectors. Although revenue is expected to grow significantly in 2025, profits are still limited due to the lack of scale effects from new businesses and substantial increases in costs and expenses.

High costs drag performance, profit growth lags behind revenue

Guangdian Yuntong was listed in 2007 and is a high-tech enterprise controlled by the Guangzhou state-owned assets. Its main businesses currently cover financial technology, urban intelligence, and smart transportation.

The earnings report shows that in 2025, Guangdian Yuntong achieved revenue of 12.068 billion yuan, an increase of 11.06%; net profit attributable to the parent was 856 million yuan, down 6.91%; and net profit after deducting non-recurring gains and losses was 779.9 million yuan, up 3.45%.

Regarding the reasons for performance changes in 2025, Guangdian Yuntong stated that the company’s theme for 2025 is “fully building core hard technology and promoting the ‘AI in all’ strategy.” It will continue to deepen the integration and innovation of AI and solutions, actively expand diversified application scenarios and service models, and lay a solid foundation for the sustainable development of the digital economy. The company’s operating income achieved double-digit growth, maintaining steady overall development.

Securities Star observes that since 2021, Guangdian Yuntong’s revenue has continued to grow. However, in recent years, its performance has shown significant volatility. From 2022 to 2024, the company’s net profit after deducting non-recurring gains and losses grew at -4.21%, 19.61%, and -7.81% respectively. Although the company successfully turned positive in 2025, the growth rate is still far below revenue growth. Moreover, in 2024 and 2025, net profit attributable to the parent continued to decline year-on-year, with the decline widening.

Multiple factors have contributed to the sluggish performance growth of Guangdian Yuntong, with the rapid rise in costs and expenses being a primary reason.

Securities Star notes that in recent years, to seize opportunities in the digital economy, Guangdian Yuntong has vigorously deepened its “industry + capital” dual-drive strategy, continuously promoting strategic transformation and business expansion. In financial technology, the company has completed acquisitions of China Financial Payment (C金支付) and Zhongshu Zhihui (中数智汇), expanding into internet payments and enterprise credit reporting. In urban intelligence, it has built a smart city application system centered on urban brains and smart government affairs, and has participated in various smart city projects through digital investment platforms. The company is also actively developing data element services, creating a full chain of data value realization, and building core competitiveness in data processing, development, utilization, and trading.

However, the transformation and business expansion have also led to rapid increases in costs and expenses. In 2024, revenue increased by 60% compared to 2021, but operating costs surged by 81%. Additionally, management and financial expenses have also increased significantly in recent years. During 2024, expenses increased by 36% compared to 2021. Coupled with increased R&D costs, profits have been significantly eroded. In 2024, net profit after deducting non-recurring gains and losses was only 753.9 million yuan, nearly the same as 714 million yuan in 2021.

In fact, performance was already under pressure in the first three quarters of last year. During that period, the company achieved revenue of 7.906 billion yuan, up 11.08%; net profit attributable to the parent was 602.2 million yuan, down 10.51%; and net profit after deducting non-recurring gains and losses was 511.1 million yuan, down 7.52%.

Securities Star notes that in the first three quarters of last year, Guangdian Yuntong’s operating costs increased by 17.15%, significantly exceeding revenue growth, leading to a sharp decline in gross profit margin. Additionally, all three expense categories increased year-on-year, with financial expenses rising by 18.76%. The increase in expenses further squeezed profit margins.

Profitability sharply declines, transformation results to be seen

Securities Star observes that in recent years, Guangdian Yuntong’s profitability has continued to be under pressure.

In 2021, the company’s overall gross profit margin reached 39.15%. Looking at business segments, the core financial technology segment, which accounts for over 60% of revenue, had a gross profit margin of 42.78%, while urban intelligence, accounting for 25.69% of revenue, had a gross profit margin of 33.18%.

Financial technology is Guangdian Yuntong’s “mainstay.” The company has a strong advantage in this area. According to its 2025 semi-annual report, Guangdian Yuntong has ranked first in the domestic smart financial equipment market for 17 consecutive years and is the largest provider and service provider of financial smart self-service devices in China. However, in recent years, as products and technologies in this field have become highly mature, competition among vendors has intensified. Additionally, with increasing bulk purchases by clients, bargaining power has expanded for customers. These factors have significantly squeezed industry profit margins. In 2024, the gross profit margin of this business fell to 34.86%. In the first half of 2025, it further declined to 33.61%.

In the urban intelligence sector, although the number of smart city pilot projects and market expenditure have increased in recent years, this field involves many sub-sectors such as e-government, smart transportation, big data, and cloud computing, with increasing competition across all segments. Coupled with the low-margin smart computing equipment acquired through acquisitions, the gross profit margin of Guangdian Yuntong’s urban intelligence business has been declining. In 2024, the gross profit margin was only 25.74%, and in the first half of 2025, it further dropped to 22.32%.

In 2024, Guangdian Yuntong’s overall gross profit margin was only 31.11%, an 8.04 percentage point decrease from 2021, and a “cliff-like” drop from its peak of 54.81%. In the first three quarters of last year, the gross profit margin further declined to 27.69%, over 12 percentage points lower than the 39.94% in the same period of 2021.

Securities Star notes that amid the continuous decline in profitability, Guangdian Yuntong is accelerating the digital transformation of its two main sectors—financial technology and urban intelligence. In financial technology, the company is speeding up the deployment of innovative businesses such as vertical scenario robots, digital payments, digital finance, and enterprise credit reporting. It is also actively promoting the “going global” of smart financial devices and innovative businesses to explore new growth points. In urban intelligence, the company is focusing on AI + scenario resource advantages, mainly transforming core areas such as government and enterprise digitalization, major transportation, intelligent computing power, and security.

However, Guangdian Yuntong’s path to smart transformation still faces multiple challenges.

On one hand, many new businesses are still in the exploratory stage, with no scale effects yet. Meanwhile, the company’s R&D investment in AI-related fields has remained high in recent years. For example, in the first three quarters of last year, R&D expenses reached 631.7 million yuan, 1.24 times the net profit after deducting non-recurring gains and losses. Such high R&D costs severely erode profits.

Additionally, Guangdian Yuntong faces goodwill impairment and synergy cost pressures from acquisitions. The company’s semi-annual report last year pointed out that as the company’s various business segments expand and M&A activities increase, its asset, operational, and personnel scales will grow, raising management risks. As of the end of the third quarter last year, goodwill reached 1.659 billion yuan. If the acquired businesses do not perform as expected in the future, Guangdian Yuntong’s performance could be heavily impacted.

With multiple challenges ahead, when Guangdian Yuntong can emerge from its transformation pain remains to be seen and further observed. (First published by Securities Star, author | Liu Haohao)