On June 6th, Cailian Press reported (Reporter Wu Xin) that the smart automobile industry has accelerated the development of Neusoft Corporation's overseas business. The company announced tonight that it has received a fixed-point notice from a well-known domestic automaker to supply its OneCoreGo 5.0 navigation product group's global navigation and EHP electronic horizon software products.

Neusoft Corporation expects that the total amount involved in the global navigation products supplied to the automaker will be about 2.177 billion yuan, and emphasized that it is expected to accelerate the development of the company's overseas business. According to the automaker's plan, the above software products will be applied to 11 global models under its next-generation platform, which are expected to be produced and launched for sale gradually this year and in the next two years.

However, because it is currently in the development stage before mass production, it will not have a direct impact on Neusoft Corporation's performance for this year and the corresponding years. The company said, "After the above vehicle models are mass-produced, the revenue will be confirmed according to the automobile factory's actual order situation each year, and is expected to not have a significant impact on the corresponding year's performance."

The OneCoreGo 5.0 navigation product group is one of the three major product systems released by Neusoft Corporation at the 2024 Beijing International Auto Show, known as One Map. One Map is a platform based on a map, covering four core products, including the global navigation (Global Navigation) and the electronic horizon (EHP) involved in the fixed-point notification, and two other products, namely intelligent speed assistance (ISA) and inertial navigation (DR).

One Store, One Sight, and One Map are all part of Neusoft Corporation's OneCoreGo global smart travel solution 5.0 product system. Among them, One Store refers to a car application store, and One Sight is a human-computer interaction based on AR technology and virtual reality's deep fusion.

With the growth of China's intelligent electric vehicle sales, an increase in the complexity of functional applications, and an increase in the use of single-car software, the demand for automotive software markets is gradually being released. EO Intelligence predicts that the market size of China's automotive software will reach 37.3 billion yuan by 2025. Neusoft Corporation, which has intelligent automobiles and interconnectivity as one of its main businesses, is also expected to share a piece of the pie.

By analyzing the company's revenue structure, it can be seen that the intelligent automobile connectivity business will contribute the most revenue to Neusoft Corporation in 2023, achieving revenue of 3.9 billion yuan, accounting for 37.14% of the company's total operating income.

However, the automobile price war is raging, and with the large-scale application in the future, the cost of a single car will still decline. Against this background, how this business will be impacted by competition within the industry remains to be seen. According to reports from Cailian Press, the head of Neusoft Corporation said, "The relevant business (automotive software) is still relatively healthy, but there may be some impact amid fierce competition among automakers, and other companies will undoubtedly have some loss in gross margin."

The spokesperson also said, "There are currently many new vehicle models, but the market is oversaturated, which has compressed the profits of the entire industry chain. We are also in this situation." According to the financial report, the gross margin of Neusoft Corporation's intelligent automobile connectivity business increased by 0.28 percentage points in 2023, with the smallest increase among the company's four main businesses.

As the heat wave of China's intelligent electric vehicles going abroad continues, Neusoft Corporation has also welcomed opportunities in overseas business. The announcement of this fixed-point notification also clearly shows Neusoft Corporation's "ambition" in the overseas business. The company said, "The fixed-point project that the company won for the automaker's global navigation software product is an upgrade to Neusoft Corporation's previous cooperation with the automaker, and will promote the further acceleration of the company's automotive overseas business, benefiting the company's business layout and sustainable rapid development."

According to the financial report, in 2023, Neusoft Corporation's newly added fixed-point amount for overseas businesses increased about three times from the same period the previous year. Its strategy for automobile overseas business is mainly "intelligent ecological solutions plus software and hardware integration/software products." It was reported that in 2023, Neusoft Corporation received T-Box product orders and navigation product fixed-point service from BYD in overseas markets, and also accepted the BMW pre-installation RTM mass production project.

It is worth noting that in recent years, Neusoft Corporation's performance has been somewhat tepid, with revenue continuing to grow, even surpassing 10 billion yuan in 2023, but its net profit was less than 100 million yuan, with non-recurring net profit losses for multiple years. According to the company's annual financial reports, the amount of inventory reduction and write-offs of bad debts continue to accumulate. In addition, receivables and bills receivable increased by 15.28% year-on-year in 2023, reaching 1.801 billion yuan, increasing the uncertainty of the company's profitability.