On the evening of February 26, Loongson Zhongke (688047) released a performance report, achieving operating income of 507 million yuan in 2024, a year-on-year increase of 0.24%; The net loss was 624 million yuan, compared with a loss of 384 million yuan in the same period last year.

The overall annual operating income of the company was the same as last year, Loongson Zhongke said that during the reporting period, the stagnation of the traditional advantageous industrial control market still existed, and the revenue of industrial control chips fell sharply; The e-government market began to pick up, and the revenue of informatization chips increased significantly; While the revenue of chip products increased significantly year-on-year, the company took the initiative to reduce the solution business, and the revenue of the solution business decreased significantly year-on-year.

Regarding the large loss of net profit, the company explained that during the reporting period, the sales volume of products in the field of information technology increased significantly, which led to a partial recovery in gross profit margin, but it has not yet recovered to the ideal level; The decline in the operating income of the industrial control chip business led to a decrease in the contribution of the gross profit of the business, which in turn affected the overall gross profit margin.

In addition, government subsidies and capital investment income that meet the conditions for profit and loss recognition decreased compared with the same period last year. In accordance with the established accounting policies, the credit impairment loss and asset impairment loss increased more than the same period last year, and is expected to exceed 200 million yuan, of which the products that have been provided for inventory impairment are more likely to be sold in the industrial control field in the later period, and are not expected to have a substantial impact on the company's operation.

Source: Screenshot of Loongson Technology's 2024 performance report

According to public information, Loongson Zhongke Technology Co., Ltd. was established in 2008 and listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange on June 24, 2022. The main business is the development, sales and service of processors and supporting chips, and the main products and services include processors and supporting chip products and basic software and hardware solutions.

Recently, an investor asked Loongson Zhongke on the interactive platform: Is Loongson's R&D manpower and financial resources insufficient? Causing some R&D projects to progress slower than expected? The company mentioned that we often follow the direction of the United States, such as cloud computing, big data, and big models. At present, Loongson combines China's industrial practice, how to lead the follow-up academic and R&D exploration direction?

In this regard, Loongson Technology replied that Loongson continues to maintain a high intensity of R&D investment, and through three years of R&D transformation, it has developed a series of chip products with strong market competitiveness, such as 3A6000, 3C6000, 2K0300, etc., and built a Linux basic software system based on LA architecture, and actively planned and promoted the research and development of Loongson's new generation of CPU, GPU and related sets.

In the secondary market, as of the close of trading on the 26th, Loongson Technology reported 143.85 yuan per share, and the company's total market value was 57.72 billion yuan.