Good afternoon, ladies and gentlemen. I am Terence Chung from China Comservice . On behalf of the management, I would like to welcome you to our company's 2026 interim results presentation. The presentation will be conducted in Chinese with simultaneous interpretation, and I will host a Q&A session later. Please put your phone on vibration mode or turn it off during the meeting. Please allow me to introduce the management present here today. Mr. Luan Xiaowei, Executive Director and Chairman. Mr. Shen Aqiang, Executive Director, Executive Vice President, and CFO. Mr. Zhang Hao, Executive Vice President. Mr. Gui Xiaoqing, Executive Vice President. Due to other important duties, Mr. Cui Zhanwei, President of the company, is unable to attend the presentation in person in Hong Kong. We hereby apologize to everyone.
Now, I would like to give the floor to our Chairman, Mr. Luan Xiaowei, to present to you the 2026 interim results overview.
Good afternoon, ladies and gentlemen. The result presentation is divided into three parts. First, I will introduce the overall of our results. In the first half of 2026, innovation in AI technology has entered an unprecedented active phase. The company focused on deepening its presence and strategic deployment in high-value business and continued to advance modernization of our governance systems and capabilities. We have shown the following features. First, taking active initiative and adapting to changes, maintaining overall stabilities in fundamentals. Secondly, continuously strengthen quality and efficiency improvement, providing support for profitability. Third, forward-looking deployment, delivering initial results of which growth engines driving transformation. Fourth, AI-driven dividend materializing with computing infrastructure business achieving robust growth.
Fifth is the strategic positioning of one positioning, four roles, helping us to seize important opportunities in new markets. First, about our financial performance. We were faced with a complex and challenging external environment. We focused on strengthening our operation, made a forward strategic deployment, and we have maintained very stable fundamentals. Revenue amounted to CNY 74.5 billion. AI dividend gradually became the primary driver of deployment. AIDC revenue grew by 63% year-on-year, accounting for nearly 10% of our revenue. By market breakdown, revenue from domestic operator market stabilized and rebounded, grew by 1.9% year-on-year. For domestic non-operator market, we have actively controlled the low-quality and high-risk projects, and we are focusing on high-value businesses for sustainable development. Overseas market maintained a compliant effective development, achieving 7.4% year-on-year growth. We have continued to drive quality and efficiency improvement.
For the first half of the year, the net profit amounted to CNY 1.97 billion, and we have controlled the key SG&A expenses, achieving steady growth in operating profit. We have followed closely the external environment and upgrades in customer demand, and we have demonstrated results in transformation and development. We have focused the new tracks of Six Major Growth Areas to build new growth drivers for high-quality development. In the first half of this year, our total new contracts amounted to CNY 100.4 billion, of which new contracts from the Six Major Growth Areas business reached CNY 34.4 billion, representing 11% year-on-year growth. The proportion of new contracts of Six Major Growth Areas business accounted for 34% of our total new contracts, increased from 29% in the same period last year. Significant growth was achieved across key areas, including AIDC, application CCS Smart Maintenance, and low-altitude economy.
The new economy momentum has been released. We have seized the market opportunities brought by the booming development of AI. In the first half of the year, new contracts in the AI+ sector amounted to CNY 12.3 billion, representing a year-on-year increase of 39%, with revenue reaching CNY 7.4 billion, up by 62%, accounting for 10% of our company's revenue. Among which, the company accelerated the large scale delivery of AIDC, with new contracts in the AIDC business growing by 33% year-on-year. We are focused on our advantages of vertical industrial scenarios to develop standardized products with new contracts in AI applications growing by 109% year-on-year. The company adheres to technological innovation as a key driver. We have deployed AI+ innovation capabilities to build a new digital intelligence foundation for the company.
In terms of AIDC capability, we have strengthened our integrated planning, construction maintenance, and operation service capabilities. We have a standard leadership, delivery excellence, and integrated construction maintenance approach. With which we have leveraged our leading EPCO integrated services capabilities to our customers with full life cycle professional services. In terms of AI products and service offerings, we have focused on central state-owned companies and vertical industries, and we have responded to the AI initiative of 19 centrally owned enterprises. We have achieved a replication of solutions across more than 10 industries, including transportation and energy. We have covered full chain AI data services and through the development of city-level transit cloud platforms and regional data hubs, progressively transform data assets into a new engine for sustainable growth.
In terms of AI talent development, we have set up our end-to-end training systems, including training bases, full stack curricula, and certification systems. We have strengthened our ability to attract talents and retain talents. We focus on building core capabilities that contribute to sustainable development. We have driven the integration of technological innovation and industrial innovation in smart services sector, promoting the development of new quality, productive forces driven by technological innovation in the intelligent infrastructure sector. We focus on the core technologies, strengthen market synergy, and build an open system and innovate incentive mechanism. We draw continuous breakthroughs and value creation in our technological innovation. We strengthen the transformation and accumulation of our innovative capabilities. We have established a three-tier new paradigm of scientific research AI transformation with national-level key initiatives and core technology breakthroughs, plus localized innovation.
We have five innovation bases in low-altitude economy, dual carbon, data elements, cybersecurity, and quantum. For our R&D investment in the first half of the year, it amounted to CNY 2 billion and investment in AI and smart applications accounted for more than 45%. Our government-allocated funding secured by the company has doubled the total amount compared to the whole year of 2025. We have breakthroughs in major national-level projects for the first time. We have accelerated our deepening of reforms and corporate governance capabilities. First, we strengthen the advantageous business segments such as telecommunication infrastructure, driving the capability leap of EPC general contracting towards full cycle EPCO. Second, we deepen reforms in specialized segments such as supply chain management, achieving the extension of value-added maintenance and operations services.
Third, we comprehensively deepen our synergetic operations, increasing the centralization of resources in key areas such as procurement, finance and funding, and audit, as well as legal affairs. Fourth, we have strengthened risk preventions in key areas and enhanced the management of people, finance and resources. And fifth, we enhance governance efficiency through AI empowerment, promoting the deployment of AI-powered digital employees, focusing on high frequency and high value scenarios to provide digital impetus for the modernization of our governance systems and capabilities. This year marks the 20th anniversary of our company's listing. Since going public, we have advanced innovation and transformation with reform-driven development, and we have explored new sectors, new markets, and we have achieved a high quality, sustainable growth. At present, the advancement of AI and green transitions has brought upon us vast opportunities.
China is actively advancing the construction of Six Networks, creating significant market opportunities for new infrastructure in informatization construction. This aligns with our company's full chain service capabilities. We will further strengthen our competitiveness and empower the digital intelligence through transformation of the society, industries and the customers. We will continue to deepen the connotation of one positioning, four roles, and accelerate our development into a service provider to AI service providers. We will strengthen our new quality, productive forces, build new relationships of production tailored to new quality, productive forces, and drive our company towards new opportunities and excellence. We attach great importance to our shareholders' return. In the past 10 years, our dividend payout ratios had remained quite stable with enhancement. To enhance the predictability of dividend, we have made the dividend return plan for the next three years.
Dividend payout ratio for 2026 to 2028 will increase from 43% in 2025. By 2028, we expect the dividend payout should be no less than 46%, creating long-term value for shareholders. This is the first part of our presentation. Now, I will invite Mr. Shen Aqiang to present the rest of the presentation.
Thank you, Chairman. I will present to you two parts of our presentation. First is the performance in the first half of 2026. Here you can see the business revenue breakdown and the overall performance of our market, which has shown the overall performance of our three business segments and three markets. From the business and the market structure, you can see that our revenue has become more diversified, and we have a showcase of resilience in our business.
Now I would like to talk about the key developments in our three major markets. First, about the domestic operator market. We focus on the customers' demand in the new type of digital information infrastructure to respond to the impact of the decline in traditional business. In the second half of the year, revenue from domestic operator markets stabilized and rebounded, reaching CNY 38.9 billion , representing 1.9% of year-on-year growth. We will seize the opportunities from operators who demand investment into new computing infrastructure, and we will cultivate business opportunities in traditional areas such as energy saving, retrofit of existing data centers and operations, as well as maintenance. And we support operators in serving and integrating into new communication network and the National Integrated Computing Power Network construction. For the domestic non-operator market, we have been impacted by the phased impact of some customers' investment pace.
We have focused our resources on the new areas. In the first half of the year, revenue from domestic non-operator reached CNY 33.2 billion . We will keep track of the trillion RMB market potential brought by the Six Networks and urban renewal, as well as the accelerated growth in emerging sectors such as AI+ computing, electricity coordination, and CCS Smart Maintenance. Our aim is to strive to achieve a steady growth in domestic non-operator market. For the overseas market, we have responded actively to the Belt and Road Initiative. We focus on Asia Pacific and communication fundamental businesses and infrastructure businesses. We have secured several key projects in AIDC. In the first half of the year, revenue from the overseas market reached CNY 2.3 billion , representing 7.4% year-on-year. Asia Pacific grew by nearly 40%, being the primary driver of our overseas business.
We will enhance our project development and operation capabilities, and we will focus on the transformation and upgrading of AIDC, new energy, and other areas. We will actively support central state-owned companies in their compute power expansion overseas, accelerating their replication of domestic capabilities, and empower digitalization of our overseas business. In the Chairman's introduction, in the first part, he mentioned about our focus on Six Major Growth Areas, so I would like to elaborate on that. In AIDC, we supported and served at the national level intelligent computing hub and the construction of the National Integrated Computing Power Network. Our footprint has covered eight national computing hubs, and we have built a full stack service model featuring EPCO general contracting, plus green liquid cooling, plus intelligent computing power maintenance, plus compute-electricity collaboration to provide customers with comprehensive infrastructure service support.
The value of the new contracts signed in this sector amounted to CNY 10.9 billion , representing 33% of growth. Here you can see a benchmark case in AIDC. We have completed the delivery of 60 MW Civil and M&E works for Ningxia Zhongwei Data Center project in just 167 days. We have spent only half of the days compared to traditional schedules. This project also adopted Alibaba 5.0 liquid-cooling Standard , with construction standard reaching the highest level in the industry. In CCS Smart Maintenance sector, we are focused on 60 technologies, and we are focused on landmark buildings in central cities, telecom operators, IDC operation and maintenance, as well as data governance. We have built standards and replicable capability systems. In the first half of the year, new contracts from this sector recorded CNY 15.6 billion , 13% growth year-on-year.
Here you can see another example in CCS Smart Maintenance. We are focused on the smart maintenance capabilities in AIDC and our capabilities towards full stack smart maintenance for liquid-cooled intelligent computing. In terms of compute-electricity collaboration, we focus on source grid, load storage, and coordinated dispatch of power. We have integrated service of compute-electricity collaboration and full chain general contracting. We have several key projects in the dual carbon and power distribution networks. Here you can see the benchmark cases in the dual carbon and power distribution network sectors. They represent our benchmark projects in energy storage, zero carbon buildings, compute-electricity collaboration, and our green electricity plus compute power green electricity direct connection models. In low-altitude economy sector, we have been partnering with key customers in transportation, government, energy management, and other sectors.
We have played a leading role in consulting these businesses with consulting and design, equipment procurement, plus implementation delivery. In the first half of the year, value of new contracts grew by 66%. For the second half of the year, we have five levers, including transformation and development, reform and renewal, technological innovation, talent strengthening, and safety enhancement. We have the confidence to maintain stability for our whole year revenue and the new signed contract. We are confident to achieve a rapid growth in the Six Major Growth Areas in AIDC. In terms of quality improvement, we can expect growth for net profit and revenue, and stable growth for gross profit margin, as well as improve the cash flow.
Here you can see our financial performance in the first half of the year, and here you can see the key financial indicators of the company. We have continued to deepen our quality and enhancement to drive improvement in our profitability. For the subcontracting charges and material costs, we have utilized AI to strengthen our penetrative project management. We have enhanced our self-delivery rate and cost-saving rates from centralized procurement. In terms of R&D expenses, we have a focus on areas such as AI, digital infrastructures, and the synergetic management of R&D and ensure R&D delivering results. In SG&A, we have controlled quite tightly, and we have seen a decline of SG&A. In terms of direct personal costs, we have optimized our resources allocation and enhanced our operation efficiency. The per capita wages have been quite stable.
In terms of the expenses management, we have effective control of SG&A expenses. Our operating profit margin have improved steadily. We will place a greater emphasis on quality development and project quality as well as cash collection, so that our gross profit margin can recover over the medium- to long- term. In the first half of the year, we have seen the impact on our net profit from the external environment. After excluding the non-comparable factors of dividend income, the change in net profit on a comparable basis is in line with the trend in revenue growth and net profit margin remain quite stable. We continue to drive our quality and efficiency enhancement, and we will achieve a stabilization and recovery in full- year net profits. We will continue to manage our working capital and focus on the account receivables and cash flow.
We will continue to adhere to the philosophy of revenue with reasonable profit or profit with match cash flow, and enhance our management project delivery, accounts receivable, cash collection, and payment. Here you can see the company's balance sheet. Our gearing ratio is very stable at a very low level. Our financial position is solid. Going forward, we will adhere to the principle of value-driven, seeking steady yet progressive growth and high-quality development, coordinate high-quality development with high-level security, and strive to achieve effective improvement in quality and reasonable growth in quantity to create greater values for our shareholders. Now we are very pleased to answer any questions you may have. Thank you.