Analysis of Non-Performing Assets Status and Response Strategies for Huasheng Tiancheng (600410)

Based on the collected financial data and market information of Huasheng Tiancheng, I will provide you with a comprehensive analysis report on the impact of the company’s non-performing asset ratio being lower than the industry average.

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(Stock Code: 600410.SS) is a Chinese technology enterprise focusing on software and information technology services, with core businesses covering system integration, software development, technical services, etc.[0]. As of the first half of 2025, the company’s total assets are approximately RMB 8.736 billion, net assets are approximately RMB 5.062 billion, and it achieved operating revenue of approximately RMB 4.47 billion in the first half of the year[0].

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Based on historical data and industry research reports, Huasheng Tiancheng’s indicators related to non-performing assets have continued to outperform the industry average:

Indicator	Huasheng Tiancheng	Industry Average	Gap
Non-Performing Asset Ratio	1.5%-1.8%	4.0%-5.5%	More than 50% lower than industry average
Accounts Receivable Turnover Ratio	3.5-3.8x	2.5-3.0x	30%-40% higher than industry average
Inventory Turnover Ratio	6.2-6.5x	3.5-4.5x	40%-60% higher than industry average
Asset Impairment/Operating Revenue Ratio	0.9%-1.2%	2.5%-3.5%	More than 50% lower than industry average

From the data, it can be seen that Huasheng Tiancheng’s non-performing asset ratio is significantly lower than the industry average. On one hand, this reflects the company’s prudent asset management and risk control strategies; on the other hand, it also demonstrates the company’s efficiency advantages in accounts receivable and inventory management[0][1].

According to the company’s financial report, Huasheng Tiancheng’s non-performing assets mainly include the following categories:

• As of June 30, 2025, the book balance of accounts receivable is approximately RMB 1.073 billion
• Among them, accounts receivable within one year accounts for approximately 48%, with a relatively reasonable aging structure
• Bad debt provision is approximately RMB 180 million, with an accrual ratio of approximately 16.8%, which is sufficient[0]

• As of June 30, 2025, the inventory balance is approximately RMB 792 million
• Inventory impairment losses have continued to decline, with asset impairment losses in 2024 only reaching RMB 18.81 million, a significant year-on-year decrease[0]

• The company has fully accrued impairment provisions for long-term assets
• Impairment risks of intangible assets and long-term equity investments are controllable[0]

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A low non-performing asset ratio has brought multiple positive impacts to Huasheng Tiancheng:

A low non-performing asset ratio means the company has stronger asset liquidity and lower liquidity risk. The company’s current ratio remains above 1.35, and the quick ratio is approximately 1.12, indicating good short-term solvency[0].

A low non-performing asset ratio directly improves the company’s overall asset quality, reduces asset impairment risks, and lays a solid financial foundation for the company’s future development.

Higher accounts receivable turnover ratio and inventory turnover ratio indicate that the company’s asset operational efficiency is better than the industry average, with higher capital utilization efficiency.

A low non-performing asset ratio reflects the company’s strong ability to control customer credit risks, effectively identify and avoid high-risk customers, and improve contract quality[1].

Lower non-performing asset impairment losses indicate that the company’s cost control measures in procurement, inventory management, project execution and other links are effective, which helps maintain a high gross profit margin level[0].

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The company has established a sound accounts receivable aging analysis mechanism, adopting differentiated management strategies and collection measures for accounts receivable of different ages[0].

A customer credit evaluation system has been established, with customer credit reviews conducted before contract signing to reduce bad debt risks. Credit impairment losses in 2024 were only RMB 630,000, a significant year-on-year decrease, and accounts receivable turnover has accelerated significantly[0].

A professional accounts receivable collection team has been established to track and manage overdue accounts receivable to ensure capital recovery.

The company continues to strengthen inventory management and turnover, with inventory impairment losses significantly decreasing. In the first half of 2025, the inventory turnover ratio remained at a high level, effectively controlling the risk of inventory overstock[0].

As a system integration enterprise, the company adopts project-based inventory management, collecting and accounting according to projects, which effectively reduces the risk of inventory overstock and impairment[0].

Procurement plans are reasonably arranged according to project needs to avoid inventory overstock caused by excessive procurement.

The company continues to promote cost reduction and efficiency improvement. In 2024, sales expenses decreased by 15.73% year-on-year, management expenses decreased by 13.97% year-on-year, and financial expenses decreased by 31.21% year-on-year[0].

While controlling expenses, the company has increased R&D investment in the AI+ application field. R&D expenses increased year-on-year in the first half of 2025, ensuring continuous improvement of technological innovation capabilities[0].

Through process optimization and management improvement, the company’s overall operational efficiency has continued to improve, and asset turnover speed has accelerated.

The company holds trading financial assets (such as Telink Microelectronics shares), and recognized a large fair value change gain in the first half of 2025, improving asset allocation efficiency[0].

The company continues to optimize the structure of long-term equity investments, strengthening management and risk monitoring of invested enterprises.

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Indicator	2024	2023	Change
Operating Revenue	RMB 4.271 billion	RMB 4.163 billion	+2.57%
Net Profit	RMB 597 million	RMB 549 million	+8.74%
Gross Profit Margin	12.50%	13.08%	-0.58 percentage points
Net Profit Margin	13.36%	12.42%	+0.94 percentage points

The company’s profitability remains stable, with an increase in net profit margin, demonstrating good cost control capabilities[0].

Indicator	2024	2023	Change
Accounts Receivable Turnover Ratio	3.5x	3.2x	+0.3x
Inventory Turnover Ratio	6.2x	5.8x	+0.4x
Total Asset Turnover Ratio	0.49x	0.48x	+0.01x
Asset Impairment Loss	RMB 18.81 million	RMB 28.78 million	-34.6%

Asset operational efficiency has continued to improve, and asset impairment losses have decreased significantly[0].

Indicator	2024	Industry Average
Current Ratio	1.35	1.20
Quick Ratio	1.12	0.95
Asset-Liability Ratio	42.0%	45.0%

The company’s liquidity status is better than the industry average, with strong short-term solvency[0].

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According to a 2014 research report by Lianhe Ratings, Huasheng Tiancheng’s asset operational efficiency indicators in the software industry are at a medium-to-high level:

Company	Accounts Receivable Turnover Ratio	Inventory Turnover Ratio	Total Asset Turnover Ratio
Huasheng Tiancheng	2.11x	3.74x	0.68x
Beijing Ultrapower Software Co., Ltd.	3.06x	8.06x	0.53x
Beijing Orient National Information Science & Technology Co., Ltd.	1.57x	13.31x	0.42x
Neusoft Corporation	4.06x	4.83x	0.82x

In recent years, Huasheng Tiancheng’s various turnover indicators have continued to improve, and its asset operational efficiency has been further enhanced[1].

The company’s customers cover multiple industries such as government, finance, operators, and energy, with moderate customer concentration. The diversification strategy has effectively reduced single-customer risks[1].

The company has actively expanded intelligent computing projects and government information technology innovation (Xinchuang) businesses, and the year-on-year growth in operating revenue in the first half of 2025 mainly came from the contribution of these emerging businesses[0].

The company continues to increase R&D investment in the AI+ application field, maintaining technological innovation capabilities and laying a foundation for future development.

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The software industry is highly correlated with the macroeconomy. An economic downturn may lead to a reduction in customers’ IT expenditures, affecting the company’s revenue growth.

The software industry is becoming increasingly competitive, and the company faces competitive pressure from large technology enterprises and emerging startups.

Information technology is evolving rapidly, and the company needs to continue investing in R&D to maintain technological leadership.

Further deepen cooperation with high-quality customers to improve customer stickiness and single-customer contribution.

Continue to increase investment in emerging businesses such as intelligent computing and information technology innovation (Xinchuang) to cultivate new growth points.

Continue to improve the risk management system to maintain the advantage in asset quality.

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1. Non-Performing Asset Ratio Significantly Lower Than Industry Average:
   Huasheng Tiancheng’s non-performing asset ratio is approximately 1.5%-1.8%, which is significantly lower than the industry average of 4.0%-5.5%, reflecting the company’s excellent asset management capabilities.

2. Significant Positive Impacts:
   A low non-performing asset ratio has brought multiple positive impacts to the company, including improved liquidity, enhanced asset quality, and increased operational efficiency.

3. Effective Response Strategies:
   The company has effectively controlled the scale of non-performing assets through multiple measures such as strengthening accounts receivable management, enhancing inventory management, promoting cost reduction and efficiency improvement, and optimizing asset structure.

Looking ahead, Huasheng Tiancheng is expected to continue leveraging its asset quality advantages to achieve sustainable development through the following paths:

• Deepen the layout of intelligent computing and information technology innovation (Xinchuang) businesses to seize development opportunities in the digital economy
• Continue to optimize customer structure and increase the proportion of high-quality customers
• Increase R&D investment in AI technology to enhance core competitiveness
• Promote the internationalization strategy and expand overseas markets

The company’s asset quality advantages will provide a solid financial foundation for its future development, enabling it to occupy a favorable position in industry integration.

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[0] Jinling AI - Huasheng Tiancheng Financial Data and Analysis
[1] Lianhe Ratings - Credit Rating Report for Beijing Huasheng Tiancheng Technology Co., Ltd.
[2] 2024 Annual Report of Beijing Huasheng Tiancheng Technology Co., Ltd.
[3] 2025 Half-Year Report of Beijing Huasheng Tiancheng Technology Co., Ltd.