Aurea Cloud Network Faces Loss Again: Decline in Traditional Business and Continuous Shareholder Reductions - When Will Massive Investments Turn into Performance?

Issuer: Sina Finance Listed Company Research Institute

Author: Hao Xian

In 2025, Guangzhou Sunac Network will achieve revenue of 7.17 billion to 7.22 billion yuan, a year-on-year decrease of 1.52% to 0.84%; losses will reach 730 million to 780 million yuan, marking the company’s return to profit in 2023, but then falling back into loss.

The main reason for the significant loss is asset impairment. Last year, an impairment provision of 891 million yuan was estimated, including 865 million yuan for goodwill impairment and 25.86 million yuan for credit impairment, a substantial increase compared to the previous year.

Excluding the impact of goodwill impairment, Guangzhou Sunac Network’s net profit ranges from 85 million to 135 million yuan, still down sharply by 64.61% to 77.72% year-on-year.

Against the backdrop of AI-driven growth in data center and cloud computing demand, Guangzhou Sunac Network faces pressures from customer structure adjustments, intensified competition, and falling prices. When will the company’s huge investments translate into performance?

Guangzhou Sunac Network Falls Back into Loss — When Will Heavy Investments Turn Into Results?

The company’s large impairment losses stem from previous acquisitions. In 2016, it acquired Beijing Zhongjin Cloud Network Technology Co., Ltd. (hereinafter “Zhongjin Cloud Network”), and in 2022, it acquired Guangzhou Zhanpu (Tianjin) Technology Co., Ltd. (hereinafter “Guangzhou Zhanpu”), resulting in substantial goodwill. This period, Zhongjin Cloud Network recorded an impairment of 838 million yuan, and Guangzhou Zhanpu 27.13 million yuan.

Zhongjin Cloud Network’s main business is internet data center infrastructure and value-added services, with IDC business shrinking consecutively since 2022. Price declines have led to revenue drops, and some clients have shifted from leasing third-party data centers to building their own data centers due to strategic adjustments. Guangzhou Zhanpu also faces intensified industry competition, strong customer bargaining power, difficulty acquiring new clients, and declining order prices.

The operational situation of subsidiaries reflects the difficulties faced by Guangzhou Sunac Network. Founded in 1999, the company positions itself as an “integrated IDC and cloud computing service provider,” with core businesses including internet data center construction and operation, cloud computing, and related value-added services.

From 2024 onwards, IDC and value-added services account for about 28.69% of revenue, while cloud computing and related services contribute 70.07%, totaling 98.76%. Since IDC leasing and operation services have higher gross margins and more stable income, they are the main pillar of performance, contributing 60-70%. Cloud computing and intelligent computing services offer growth potential.

With the development of AI industry, demand for AI training and inference has surged, driving rapid growth in cloud vendors’ cloud business revenue. Especially in Q4 2025, AI inflation chains are spreading from storage to CPUs, with cloud computing seen as the next inflation trend. Under various “concepts,” Guangzhou Sunac Network’s stock remains active in the secondary market, with notable gains.

However, for Guangzhou Sunac Network, things are not so simple. In fact, traditional IDC business is undergoing structural adjustments, with some regions experiencing supply-demand imbalances, and increased competition leading to price declines. Meanwhile, major clients and demand are changing structurally, with industry clients consolidating into large orders, fewer customers, and high customer stickiness, resulting in strong bargaining power, difficulty in acquiring new clients, and intensifying industry competition. Additionally, stricter industry regulations on data center energy consumption and efficiency are increasing costs for equipment upgrades and maintenance.

These changes directly weaken profitability. In 2024, IDC and value-added services revenue decreased by 5.96%. In the first three quarters of 2025, IDC revenue grew slightly by 1.53%. The company disclosed that new cabinet deployments increased fixed asset capitalization, but pre-operating expenses, fixed costs, and operational costs continued to rise. Some clients also withdrew, causing IDC gross margin to fall to 32.12%, down 3.55 percentage points from the previous year.

Notably, as Guangzhou Sunac Network rapidly expanded and customer structure changed, overall utilization rates dropped sharply—from about 75% previously to around 70% in 2024, and down to 60% in 2025.

As traditional IDC growth stalls, intelligent computing services have become a new growth direction. The company is accelerating deployment of AIDC (AI Data Center) services, though currently on a small scale, with annual contract amounts exceeding 100 million yuan.

Cloud computing revenue has also declined since 2024, down 7.98% in 2024 and 9.83% in the first three quarters of 2025, with gross margins decreasing by 1.46 percentage points. The company states that client business adjustments and proactive customer structure optimization have led to lower cloud revenue compared to the previous year. Subsidiary Wushuang Technology has also seen revenue decline due to increased competition and reduced customer demand.

High Fixed Assets and Liabilities, Major Shareholder Continues to Reduce Holdings

Under continuous heavy asset investment, Guangzhou Sunac Network’s fixed assets and liabilities have expanded. As of the end of Q3 2025, fixed assets and construction in progress totaled 12.224 billion yuan, a 36% increase since 2022.

To stay competitive, IDC providers must invest heavily in cabinet expansion, intelligent computing centers, and data center upgrades to meet client needs. Projects in Tianjin Baodi, Shanghai Jiading Phase II, Changsha Phase I, and Hangzhou are still under construction. By the end of 2024, the company launched projects in Linggeer New District and Hohhot Computing Power Base. The total cabinet deployment is planned to reach 230,000 units, with 82,000 units (2,600 racks) deployed in 2025.

With ongoing expansion, Guangzhou Sunac Network’s interest-bearing debt reached 5.802 billion yuan by Q3 2025, including short-term debt of 2.146 billion yuan, exceeding cash holdings. In 2023, financial expenses peaked at 218 million yuan, accounting for 56% of net profit. After repaying dollar loans at the end of 2023, financial expenses decreased significantly. However, in the first three quarters of 2025, they still reached 93.76 million yuan, accounting for 65% of net profit.

Meanwhile, the company has accumulated large amounts of accounts receivable, reaching 2.358 billion yuan by Q3 2025, accounting for 43% of revenue. Despite revenue declining since 2024, receivables have not decreased proportionally.

This is related to changes in customer structure and fierce industry competition, with Guangzhou Sunac Network having weaker bargaining power over large clients. In 2024, credit impairment losses amounted to 55.65 million yuan, highlighting hidden risks in the sizable accounts receivable.

In this context, the controlling shareholder has begun reducing holdings. The controlling shareholder, Zhoushan Baihuida Venture Capital Partnership (Limited Partnership), held 25.75% of shares before March 2025. Between March and June 2025, it reduced its stake by 2.99%, cashing out 784 million yuan. From September to November 2025, the shareholder’s concerted parties reduced holdings by a total of 0.07%. On February 13, this year, the shareholder announced a plan to reduce up to 3% of shares. Additionally, senior management also reduced holdings in August 2025.

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Responsible Editor: Company Observation