New Stock Preview | Research and Development Outsourcing Exposes Hollowing of Technology, Rongxin Shulian's AI Story with Accelerating Profit Release is Difficult to Tell

The global storm of generative AI is shining a spotlight on decision-making AI in the capital market. Following the opening of the Hong Kong Stock Exchange doors by BAIRONG-W (06608) in 2021, the AI decision-making sector in the Hong Kong Stock Exchange saw significant acceleration in 2026. Companies like Hai Zhi Technology (02706), DEEPZERO (02723), and WENGE AI (01956) completed their listings successively within the year. At the same time, Huayuan Computing and Rongxin Shulian have also submitted their prospectuses and are preparing to debut on the Hong Kong Stock Exchange. Moving from "individual breakthroughs" to "group debuts," the Hong Kong Stock Exchange is gradually building a complete valuation system for the decision-making intelligence sector. On June 17th, Rongxin Shulian submitted its application to the Hong Kong Stock Exchange Main Board, with Horace Capital as the sole sponsor. According to Frost & Sullivan data, based on revenue in 2025, Rongxin Shulian ranks ninth in the Chinese decision-making intelligence application industry, with a market share of about 1.3%. It is worth noting that Rongxin Shulian has already achieved profitability. From 2023 to 2025, Rongxin Shulian's revenues were approximately 280 million (RMB, same below), 281 million, and 381 million respectively, showing stable growth. The adjusted net profits for the same period were 22.035 million, 29.923 million, and 42.787 million respectively, with a compound annual growth rate of 39.28%. Compared to the common occurrence of losses in the industry, Rongxin Shulian's profitability is undoubtedly a major highlight. However, this also exposes potential hidden concerns for the company. "Reducing costs and increasing efficiency" accelerates profit release, outsourced research and development reveals technological "hollowing out" Founded in 2015, Rongxin Shulian has been deeply involved in the field of decision intelligence solutions. The company's decision intelligence solution integrates four core modules: "Dai" - Data Intelligent Decision Combination, "Han" - Fusion Analysis Data Platform, "Ge" - Data Governance Toolset, and "Jun" - Secure and Trustworthy Data Framework. With these four modules, Rongxin Shulian's decision intelligence solution can cover the end-to-end capabilities of the entire data lifecycle, enabling customers to systematically obtain, integrate, analyze, and operate data to support intelligent decision-making. The prospectus shows that Rongxin Shulian's decision intelligence solution has achieved penetration across all scenes, covering six major areas: smart cities, financial businesses, communication security, industrial energy, transportation logistics, and healthcare and education. Among them, smart cities are the core pillar, contributing 41.7% of revenue in 2025; followed by financial and business services, communication and information security, industry and energy, accounting for 19.2%, 15.3%, and 13.7% respectively; transportation and logistics and healthcare and education currently have relatively smaller proportions, accounting for 6.6% and 3.5% respectively. Rongxin Shulian's stable revenue growth since 2023 is mainly due to the continuous penetration of the company's products in various sectors. For example, revenue from smart cities increased from 86.492 million in 2023 to 158 million in 2025, playing a continuous stabilizing role; at the same time, revenue in communication and information security, industrial and energy scenes also continued to grow, only revenue from transportation and logistics scenes continued to decline. While revenue has been steadily increasing, the accelerated release of profits on the part of Rongxin Shulian is mainly due to the continuous decrease in the proportion of total operating expenses. From 2023 to 2025, the proportion of Rongxin Shulian's total operating expenses to total revenue was 27.08%, 23.36%, and 16.84% respectively, with a significant decrease of over 10 percentage points in the proportion of the three expenses over two years. This profit release brought about by "cost reduction and efficiency improvement" essentially belongs to the adjustment of operational leverage, rather than a direct reflection of the intrinsic growth momentum of the business. As the expense ratio approaches a critical point, the marginal utility of this strategy may gradually diminish. Taking a further look at the breakdown of the three expenses, more crucial details can be revealed. In 2025, sales and marketing expenses, administrative expenses, and research and development expenses accounted for 2.44%, 3.02%, and 11.38% of total revenue respectively. Sales and marketing expenses and administrative expenses are relatively low. This is mainly because Rongxin Shulian's customer acquisition side does not follow the conventional model of "sales army + brand promotion + SaaS customer expansion" like other AI companies, but instead adopts a path of oversubscription tenders, subcontracting through third-party integrators, and binding with key customers. According to the prospectus, in 2025, 65.5% of Rongxin Shulian's customer revenue came from private enterprises, with the majority being third-party integrators. In addition, the revenue from state-owned enterprises and government entities accounted for 34.5%, and in 2024 and 2025, revenue from the top five customers accounted for more than 50%. With such a customer structure, Rongxin Shulian does not need to maintain a large sales team, thus achieving lower sales and marketing expenses and administrative expenses. The customer structure of Rongxin Shulian is mainly determined by the company's product form. Rongxin Shulian's "Data Intelligent Body Graph" technology (Dai-Han-Ge-Jun four matrix) addresses the segment of "data integration analysis decision," rather than providing full-stack solutions for specific scenes. The hardware procurement, application delivery, and operation maintenance are all not included, so most products are embedded in the total solution of the contractor in the form of a "module subcontractor," which also makes the company's procurement costs almost equal to sales costs. In 2025, Rongxin Shulian's procurement costs accounted for 96.9% of total sales costs. The direction of research and development spending further exposes the "hollowing out" of Rongxin Shulian's technological foundation. The prospectus shows that in 2024 and 2025, the proportion of "research and development cooperation costs" in Rongxin Shulian's research and development expenses reached 93.7% and 93.9% respectively. The so-called "research and development cooperation" essentially involves outsourcing the development of core technologies to academic institutions such as Peking University and third-party technology companies, who deliver results according to agreements and also provide guidance. It can be seen that Rongxin Shulian's "continued profitability" is actually a financial mirror under its "module subcontractor" positioning: relying on integrator channels and high customer concentration, the company compresses sales and marketing expenses to the extreme; in the middle, it replaces self-delivery with high procurement costs of up to 96.9%, effectively shifting sales expenses into operating costs; at the backend, it outsources core research and development under the guise of "cooperation," thus avoiding the expense of heavy asset team building. In the current environment where AI companies generally "invest heavily in their sales force, focus on self-research barriers, and aggressively snatch top talents," Rongxin Shulian's counter-strategy of "asset-light" fundamentally exposes its commercial nature - rather than being defined as an AI technology company, it is better to define it as a "solution assembler" that relies on external technology inputs and is good at project integration. The decline in gross profit margin indicates weak bargaining power, while the continuous decline in the number of new projects signed suggests diminishing growth momentum. From 2023 to 2025, the number of new projects signed by Rongxin Shulian decreased steadily, with 166, 105, and 92 new projects respectively. As of April 30, 2026, only 36 new projects were added. In terms of project value, the contract value at the beginning of the year in 2024 and 2025 was all above 110 million, laying a solid foundation for stable revenue within the year. However, at the beginning of 2026, the unfinished contract value sharply decreased to 62.812 million, putting pressure on the performance release in 2026. If the new contract amount does not significantly increase during the year, it may drag down the performance in 2026, testing the company's ability to sign new orders. It is worth noting that although the decision-making AI industry is still a promising field, the intensity of competition cannot be ignored. Frost & Sullivan predicts that from 2025 to 2030, the size of the Chinese decision intelligence application market will increase from 38.1 billion to 80.4 billion, with a compound annual growth rate of 20.5%, maintaining rapid double-digit growth in the overall market. However, due to the rapid advancements in AI technology and the influx of new enterprises, although the market competition landscape is relatively dispersed, it is intensifying. In 2025, the market share of the top five participants in the Chinese decision intelligence application market was approximately 12.8%, while Rongxin Shulian ranked ninth in terms of 2025 revenue, with a market share of 1.3%. In a situation of continuous intensifying market competition and Rongxin Shulian not having a dominant scale advantage, the uncertainty of whether its development model of outsourcing research and development can establish long-term competitive advantage remains significant.