INSPUR DIGI ENT (00596) issued a profit warning, expecting a mid-term net profit attributable to the parent company of approximately 60 million to 70 million yuan, a year-on-year decline of about 61.1% to 66.7%.

INSPUR DIGI ENT (00596) released an announcement regarding a preliminary assessment of the company's unaudited consolidated management accounts for the 6 months ending June 30, 2026 (the reporting period): It is anticipated that the operating revenue during the reporting period will be between approximately RMB 3.7 billion and RMB 3.8 billion, representing a year-on-year decrease of about 11.6% to 14.0% compared to the same period in 2025 (approximately RMB 4.3 billion). The net profit attributable to the owners of the company is expected to be between approximately RMB 60 million and RMB 70 million, reflecting a year-on-year decrease of about 61.1% to 66.7% compared to the same period in 2025 (approximately RMB 180 million). The decline in both operating revenue and net profit attributable to the owners of the company is primarily due to: (i) strategic adjustments in the company's business layout, focusing on the core AI sector, optimizing order structure, and proactively reducing the scale of orders accepted for traditional Internet of Things (IoT) solutions; (ii) the further tightening of client compliance requirements and the impact of improved product standards due to advancements in AI technology, which has extended the delivery cycles of certain projects and slowed the pace of revenue recognition; and (iii) sustained investment in AI to implement the medium- to long-term development plan of the AI-native strategy, which has subjected profitability to temporary pressure. During the reporting period, the AI application business and intelligent computing center business demonstrated robust development momentum, with business scale steadily increasing, primarily benefiting from: (i) the accelerated implementation of the groups "1321" strategy, which continues to refine a corporate AI-native intelligent product system based on a "four-layer three-drives" core structure, seamlessly integrating the four core levels of models and data, intelligent platforms, intelligent applications, and intelligent interactions, launching core digital intelligence products such as the Inspur Haiyue Mano intelligent execution system, which have seen applications in several central and state-owned enterprises, driving rapid growth in the AI application business; and (ii) the domestic business of the intelligent computing center deepening its layout around the "East Data, West Computing" initiative and its eight national computing power hub nodes, while focusing on core markets in Southeast Asia for its overseas business, with orderly progress in computing infrastructure construction and a continuous increase in the regional computing service market share. The group will continue to adhere to the "1321" strategy, strengthen strategic focus, optimize business structure, promote internal quality improvements, continuously enhance the market competitiveness of software and AI products, and accelerate progress toward becoming a world-class provider of enterprise software and AI product technologies and services. The board of directors and management are confident in the company's future development.