Analysis of China Great Wall's 2025 Loss Reduction: Support from Investment Income and Long-Term Sustainability Assessment

Based on collected data and in-depth analysis, I will systematically interpret the supporting role of investment income from divesting non-core assets in China Great Wall’s path to turning profitable against the backdrop of loss reduction.

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According to the performance forecast released by China Great Wall (000066.SZ) on January 19, 2026, the company expects to report a net loss attributable to shareholders of listed companies of

in 2025, compared to a substantial loss of in the same period of the previous year, representing a year-on-year sharp loss reduction of [1][2]. This loss reduction magnitude is a significant improvement among A-share listed companies.

From the perspective of net profit after deducting non-recurring gains and losses, the company expects a loss of

in 2025, a 50.01% to 57.44% reduction from the same period last year[2]. This indicator better reflects the actual operating status of the company’s core business.

Financial Indicator	2024	2025 Forecast	Change Range
Net Profit Attributable to Shareholders	-RMB 1.479 billion	-RMB 35 million ~ -RMB 70 million	95.27% - 97.63% Loss Reduction
Net Profit After Deducting Non-Recurring Gains and Losses	-RMB 1.480 billion	-RMB 630 million ~ -RMB 740 million	50.01% - 57.44% Loss Reduction
Basic Earnings Per Share	-RMB 0.459	-RMB 0.011 ~ -RMB 0.022	Significant Improvement
Non-Recurring Gains and Losses	-	RMB 595 million ~ RMB 670 million	Mainly from Asset Disposal Gains

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According to the performance forecast, the company’s non-recurring gains and losses attributable to shareholders of listed companies in 2025 are expected to be approximately

, mainly derived from [1][2]. This scale of gains is relatively high among listed companies.

Looking at H1 2025 data, the company achieved a net profit attributable to shareholders of

in H1 2025, turning profitable year-on-year, of which non-recurring gains and losses accounted for approximately [3]. This indicates that although the core business still posted a loss in H2, asset disposal gains continued to contribute.

Through calculation and analysis, investment income from divesting non-core assets has played a

in China Great Wall’s 2025 loss reduction:

• Net loss after deducting non-recurring gains and losses (core business):
  RMB 630 million to RMB 740 million
• Non-recurring gains and losses (investment income, etc.):
  RMB 595 million to RMB 670 million
• Net loss attributable to shareholders:
  RMB 35 million to RMB 70 million

• Minimum coverage of operating losses by investment income:
  80.4%
• Maximum coverage of operating losses by investment income:
  106.3%

This means that, excluding non-recurring gains and losses, the company’s core business would still face a loss of

. Investment income almost fully covers the operating losses of the core business, serving as the core driver for the company’s significant loss reduction.

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In the short term, investment income has effectively supported the improvement of the company’s performance:

1. Loss reduction target basically achieved
   : The net loss dropped from RMB 1.479 billion to only RMB 35 million - RMB 70 million, with a loss reduction rate of over 95%, approaching the threshold of turning profitable.

2. Profitable in H1 2025
   : The company achieved a profit of RMB 100 million - RMB 145 million in H1 2025, mainly supported by non-recurring gains and losses[3].

3. Cash flow improvement
   : Cash inflows from asset disposal help improve the company’s financial condition and optimize its asset structure.

However, from the perspective of long-term sustainability, investment income

:

• The net loss after deducting non-recurring gains and losses remains RMB 630 million - RMB 740 million, indicating no fundamental improvement in the operating status of the core business.
• According to the latest financial data, the company’s current ROE is
  -6.97%
  and net profit margin is
  -5.20%
  [4], remaining in a loss-making state.

• Asset disposal gains are essentially one-off transactions, which are difficult to replicate annually.
• As divestible non-core assets decrease, such gains will gradually shrink in the future.

• The company posted a profit of RMB 100 million - RMB 145 million in H1, while H2 is expected to report a loss of approximately RMB 52 million (mid-point of full-year loss).
• This indicates that after the marginal decline of investment income, the company’s performance still faces pressure.

• If large-scale asset disposal cannot be continued in 2026, the company’s performance may see a sharp widening of net loss.
• The market needs to be alert to the unsustainable risk of the “profiting by selling assets” model.

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Although investment income plays a key supporting role, the company’s core business is also improving actively:

According to the announcement, the company

[1]. This indicates that the company is:

1. Business structure optimization
   : Focusing on two core businesses: computing industry and system equipment
2. Product portfolio upgrade
   : Enhancing the competitiveness of independent and secure products
3. Gross profit improvement
   : Achieving steady growth in operating revenue, driving year-on-year improvement in gross profit

As a core enterprise under China Electronics Information Industry Group, the company still has competitive advantages in the following areas:

• Computing industry
  : The most complete and strongest independent and secure product line in China, covering PCs, laptops, servers, industry terminals, etc.
• System equipment
  : Core supplier in communication, special computing, and marine informatization businesses
• Indigenous Innovation (Xinchuang) Opportunities
  : Benefiting from the downward expansion of party and government indigenous innovation and the accelerated advancement of industry indigenous innovation in central SOEs and local SOEs

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1. Short-term focus
   : Sustainability of non-recurring gains and losses and 2026 asset disposal plan
2. Mid-term focus
   : Progress of gross profit margin improvement in core business and order acquisition status
3. Long-term focus
   : Market competitiveness and technological breakthrough capability of the company’s independent computing products

1. Performance fluctuation risk
   : Investment income is one-off in nature, and 2026 performance may fluctuate significantly
2. Core business risk
   : Net loss after deducting non-recurring gains and losses remains, with no fundamental improvement in profitability
3. Industry competition risk
   : Intensified competition in the indigenous innovation (Xinchuang) industry, putting pressure on product prices and gross profit margins
4. Asset disposal risk
   : Limited divestible assets, making it difficult to sustain future gains

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Based on comprehensive analysis,

.

• ✅
  Short-term effectiveness
  : Investment income covers approximately 80% to 106% of operating losses, serving as the core driver of significant loss reduction in 2025
• ❌
  Long-term uncertainty
  : The core business remains in loss, and the one-off nature of investment income casts doubt on performance sustainability
• ⚠️
  Focus on transition
  : Investors should focus on the progress of profitability improvement of the company’s core business in 2026

The company needs to continuously optimize its business structure and enhance core business profitability to achieve a truly sustainable turnaround to profitability, rather than relying on one-off asset disposal gains. At the current stage, the company is still in a critical period of strategic transformation, and its investment value requires cautious assessment.

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[1] National Business Daily - China Great Wall: Expected Net Loss of RMB 35 Million ~ RMB 70 Million in 2025 (https://www.nbd.com.cn/articles/2026-01-19/4226588.html)

[2] Eastmoney - China Great Wall Expects Net Loss of RMB 35 Million to RMB 70 Million in 2025, with 95.27% to 97.63% Year-on-Year Loss Reduction (https://finance.eastmoney.com/a/202601193623529046.html)

[3] Sina Finance - China Great Wall: Expected Profit of RMB 100 Million - RMB 145 Million in H1 2025, Turning Profitable Year-on-Year (https://finance.sina.com.cn/stock/relnews/cn/2025-07-14/doc-inffmyai6403140.shtml)

[4] Jinling AI - Company Profile and Financial Data of China Great Wall (000066.SZ) (API Data)

[5] Zheshang Securities Research Institute - Rebuilding the Great Wall of Independent Computing Industry (https://pdf.dfcfw.com/pdf/H3_AP202307071592079080_1.pdf)