After losing 358 million yuan, Neusoft is embroiled in a "disguised salary cut" controversy
Neusoft has once again been thrust into the spotlight.
This time it is not because of AI or smart vehicles, but a set of details on the employee side: According to reports from Sina Tech, multiple Neusoft employees have stated that the company has lowered the housing fund contribution ratio for some employees from 10% to 6%, while imposing stricter arrangements on lunch breaks and dining hours.
Some employees also claimed that the cafeteria windows do not serve meals before 12:00, and the lunch break in some buildings has been reduced to half an hour. Neusoft responded that the adjustment is a routine annual change made in accordance with relevant housing fund management regulations.
From a regulatory perspective, it is not uncommon for enterprises to adjust their housing fund contribution ratios within the compliant range. However, when paired with the annual report released on April 28, this incident appears to be a manifestation of outwardly exposed operational pressures.
In 2025, Neusoft delivered its worst financial performance in five years.
The annual report shows that Neusoft Group achieved operating revenue of 12.038 billion yuan in 2025, a year-on-year increase of 4.14%; its net profit attributable to shareholders was a loss of 358 million yuan, down 668.07% year-on-year. In other words, the company's revenue is still growing, but its profits have taken a downward turn.
Revenue has not stopped growing, but profits have failed to keep up. This situation is more troublesome than a simple decline in revenue.
Because it indicates that Neusoft's problem is not a "lack of business", but that it is becoming increasingly difficult to make money from its operations.
Has the long-established software firm turned into a low-margin asset?
Neusoft was once known as the "first stock of Chinese software".
Listed in 1996, its founder Liu Jiren was hailed as the "Godfather of Software". For a long period of time, Neusoft represented the early dividends of China's software outsourcing, industry informatization, and government-enterprise system construction. The ideal state for a software company is characterized by high gross margins, asset-light operations, and replicable business models.
However, today's Neusoft is no longer a pure software company.
The annual report shows that Neusoft's current business covers four major sectors: healthcare and social security, smart vehicle connectivity, smart cities, and enterprise connectivity and others. In 2025, the revenue of these four sectors reached 1.902 billion yuan, 4.687 billion yuan, 2.1 billion yuan, and 3.348 billion yuan respectively.
Among them, smart vehicle connectivity has become Neusoft's largest source of revenue, accounting for nearly 40% of total revenue.
This is exactly where the problem lies.
In 2025, the gross margin of the smart vehicle connectivity business was only 13.62%. In contrast, the gross margin of the healthcare and social security sector was 34.98%, that of enterprise connectivity and others was 26.84%, and that of smart cities was 21.88%.
The largest business segment is the one with the lowest gross margin.
This is one of the core reasons for Neusoft's unsatisfactory profit statement. The company has indeed expanded its revenue scale, but its revenue structure has become heavier, dragging down the overall gross margin.
Smart vehicles are not an easy industry to profit from. It requires long-term cooperation with automakers, with lengthy project cycles, heavy R&D investment, and strong bargaining power from customers. The automotive industry itself has been fiercely competitive in recent years, making it difficult for suppliers to stay unaffected. Neusoft has achieved scale in this track, but this scale has not been translated into corresponding profits.
The moat of the old software company is turning into operational costs.
What employees see are the changes in housing fund contributions and lunch breaks, which correspond to cash flow and asset turnover in the financial statements.
In 2025, the net cash flow generated from Neusoft's operating activities was 451 million yuan, a year-on-year decrease of 47.24%. The company explained that this was mainly due to an increase in cash paid to and on behalf of employees compared to the same period of the previous year.
At the same time, Neusoft's inventory and accounts receivable remain at high levels.
In 2019, Neusoft's inventory was only 1.533 billion yuan; by 2025, the inventory had reached 4.153 billion yuan. Accounts receivable also increased from 1.265 billion yuan in 2020 to 1.827 billion yuan in 2025.
High inventory means that project delivery and product turnover tie up capital; high accounts receivable means that funds have not been returned to the company's accounts in a timely manner. For a project-based software company, both factors will gradually erode operational flexibility.
More directly, there is the asset-liability ratio. In 2025, Neusoft's asset-liability ratio rose to 50.89%, an increase of 5.25 percentage points year-on-year, reaching a historical high. The company's total liabilities amounted to 9.493 billion yuan, of which current liabilities were 8.424 billion yuan; monetary funds stood at 2.616 billion yuan, down from 3.262 billion yuan in 2019.
Looking at this set of figures together, it is easy to understand why Neusoft has started to calculate costs in greater detail.
Cost reduction did not happen suddenly. It is the result of combined pressure from cash flow, expense ratios, gross margins, accounts receivable, and inventory.
The AI story is still in the investment phase, with profits under pressure first
Neusoft is certainly telling new business stories as well.
In 2025, the company proactively increased investment in areas such as AI and data value realization. The annual report shows that Neusoft's R&D expenses reached 1.186 billion yuan in 2025, a year-on-year increase of 34.27%, hitting a record high; management expenses were 823 million yuan, up 8.44% year-on-year.
The company's explanation is: Increased R&D and market investment in AI and data value realization, coupled with the advancement of organizational and business transformation, have led to a phased increase in costs and expenses.
New businesses are still burning capital, while old businesses do not generate sufficient profits.
Neusoft has made progress in securing AI-related orders. In 2025, the company signed new contracts for vertical domain AI applications worth 1.073 billion yuan, a year-on-year increase of about 58%; among these, contracts in the AI+healthcare sector reached 691 million yuan, up about 42% year-on-year; the contract value of data value realization-related businesses increased by about 45% year-on-year.
However, there is still a long way to go between contract value and actual profits. Every link, from project implementation and delivery to acceptance and payment collection, consumes time and cash flow.
Neusoft itself has also stated that it takes time for AI and data value realization projects to translate into performance, and revenue can only be recognized after the projects are completed.
This is the current dilemma facing Neusoft: it needs to promote its AI transformation externally, while internally feeling the pressure of rising costs first.
The cafeteria windows reveal the company's operational state earlier than the annual report
This public opinion storm surrounding Neusoft appears on the surface to be a dispute over employee benefits, but at its core, it reflects the transformation pains of a long-established software enterprise.
The company can justify that the housing fund ratio adjustment complies with regulations; it can also state that lunch break management is aimed at improving efficiency.
However, when a company's profit statement is already under pressure, any reduction in employee benefits will be interpreted as a "disguised pay cut".
What Neusoft needs to prove is not whether it has the right to adjust the housing fund contribution ratio, but what tangible results these cost-reduction measures can deliver.
If after cost reduction, AI contracts can be converted into profits, the gross margin of smart vehicle connectivity can be improved, and accounts receivable and inventory can be reduced, then these tightened management measures can at least be seen as a necessary cost during a difficult transformation period.
If this does not happen, employees will only remember one thing: the company talks about AI, data assets, and intelligent transformation, but in the end, it has cut costs on their housing fund contributions and lunch time first.
The capital market focuses on the profit statement, while employees focus on the cafeteria windows.
Sometimes, the rule of no meal service before 12:00 reveals the change in a company's operational state faster than an annual report.
After senior executives took pay cuts, employee benefits were also recalculated
In 2025, Neusoft's senior management team also implemented collective pay cuts. Among them, Liu Jiren, the founder and honorary chairman, saw his salary reduced by more than 39%, and Rong Xinjie, the chairman and CEO, had his salary cut by nearly 20%.
Neusoft seems to be pursuing cost reduction with "united efforts from top to bottom".
However, employees may not feel the same way.
Because for senior executives, a pay cut is a governance signal; for ordinary employees, a reduction in the housing fund contribution ratio is a tangible change in their disposable income. Reducing the lunch break from one hour to half an hour is not just a financial statement item, but a management experience they face every day.
This is where many companies are most likely to encounter problems when implementing cost reduction measures.
The company believes it is optimizing organizational efficiency, but employees feel that benefits are being reduced, management is becoming stricter, and trust is eroding.
In particular, Neusoft is not a startup, but a long-established software enterprise with a history of more than 30 years. Employees' expectations for it go far beyond "having a job to do", but also include stability, dignity, and organizational commitment. Once these elements are recalculated, the emotional backlash will be more pronounced than a simple pay cut.
Over the past few years, Neusoft has been working on spinning off different businesses to allow the capital market to reevaluate its value.
Neusoft Education has been listed on the Hong Kong Stock Exchange and later renamed Neusoft Ruixin Group; Xikang Cloud Hospital has also been listed on the Hong Kong Stock Exchange. Businesses such as Neusoft Medical, Neusoft Reach, and Wanghai Kangxin form Neusoft's new business stories in the healthcare, automotive, and digitalization sectors.
However, these innovative businesses have not completely improved the parent company's profit statement.
In 2025, Neusoft Medical recorded revenue of 3.697 billion yuan with a net loss of 317 million yuan; Xikang achieved revenue of 464 million yuan with a net loss of 38.93 million yuan; Neusoft Reach had revenue of 885 million yuan with a net loss of 54.15 million yuan; Rongsheng Insurance posted revenue of 435 million yuan with a net loss of 27.39 million yuan.
These businesses all sound like they are in hot tracks: healthcare, automotive, insurance tech, and AI. However, being in a popular sector does not guarantee profits, and spinning off businesses does not mean achieving profitability.
In the past, Neusoft relied on spin-offs, capital increases, and investment income to provide phased support for its profit statement. For example, in 2017, the capital increase and share expansion of its subsidiary Neusoft Wanghai caused the company to lose control, and Neusoft recognized a one-time book investment income of 688 million yuan, making its net profit attributable to shareholders reach 1.058 billion yuan that year.
However, one-time gains cannot be achieved every year.
When the capital market story comes to an end, the parent company has to return to its core business operations: revenue quality, gross margin, payment collection, and expense control.
This is the real exam that Neusoft is facing right now.
This article is from the WeChat public account "Market Cap Crystal", authored by the Editorial Department, and published with authorization from 36Kr.