HK Stock Market Move | INSPUR DIGI ENT (00596) fell nearly 7% after issuing a profit warning, expecting a more than 60% year-on-year decline in net profit attributable to shareholders for the half-year.

INSPUR DIGI ENT (00596) dropped nearly 7% after issuing a profit warning. As of the time of this report, it has declined by 6.33%, trading at HKD 2.145, with a transaction volume of HKD 16.03 million. In terms of news, INSPUR DIGI ENT announced that it expects revenue for the first half of the year to be between RMB 3.7 billion and RMB 3.8 billion, a year-on-year decrease of approximately 11.6% to 14%. During this period, the net profit attributable to shareholders is projected to be between RMB 60 million and RMB 70 million, representing a year-on-year decline of approximately 61.1% to 66.7%. The announcement stated that the decline in performance is mainly due to the company's strategic adjustment of its business layout, focusing on the core AI sector, optimizing its order structure, and proactively reducing the scale of order intake for traditional IoT solutions. The delivery cycles for some projects have been extended due to stricter compliance requirements from customers and the increasing demands for products driven by advancements in AI technology, resulting in a slower recognition of revenue. Additionally, in order to implement the long-term development plan of the AI-native strategy, the company continues to increase its investment in AI, which has put pressure on its profitability in the short term.