BAIWANG CO (06657) issues a profit warning, expecting a net loss of approximately 25 million to 45 million yuan, a year-on-year shift from profit to loss.

BAIWANG CO (06657) announced that the group expects to record for the six months ending June 30, 2026: (1) total revenue of approximately RMB 290 million to RMB 310 million, compared to total revenue of RMB 348 million for the same period in 2025; (2) a net loss of approximately RMB 25 million to RMB 45 million, whereas the net profit for the same period in 2025 was RMB 3.6 million; and (3) an adjusted net loss of approximately RMB 20 million to RMB 40 million, while the adjusted net profit for the same period in 2025 was RMB 4.6 million. According to currently available information, the board believes the above changes are mainly due to: (1) the group proactively reducing low-margin digital precision marketing services and further concentrating resources on core businesses such as finance and taxation digitization, artificial intelligence, and globalization. This adjustment has impacted the group's revenue during the reporting period. The group made this adjustment to optimize the revenue structure and resource allocation, and to focus resources more on core businesses; (2) as artificial intelligence technology and niche applications continue to develop, the group has been investing in the large model Baibao and the Tax Token Factory focused on the finance and taxation sector. Baibao focuses on financial and tax scenarios; the Tax Token Factory converts computing power, model reasoning, and application services into a deployable, measurable, and deliverable Token production and service system. Corresponding costs and expenses were incurred during the reporting period, while the income contribution from this business has not yet been fully realized, which has had a temporary impact on the group's profitability during the reporting period; (3) the group continues to make upfront investments in the TaxSwift overseas finance and taxation compliance and electronic invoicing platform to seize long-term opportunities brought by the digitalization needs of global enterprises and overseas compliance. The above changes mainly reflect the groups business adjustments and resource investments in response to business development and market conditions, aiming to enhance the standardization of products, the scalable reuse efficiency of artificial intelligence capabilities, and the proportion of recurring revenue, while supporting the medium- and long-term development of core businesses.