On August 20, 2026, mainland Chinese cybersecurity company Gel Software reported a loss of 84.76 million yuan in 2025, and is expected to incur further losses of 55 to 80 million yuan in the first half of this year. As of August 19, the stock has fallen by 37% year-to-date, and one of the controlling shareholders, Lu Haitian, plans to reduce his stake by nearly 2%.
According to a report by the Economic Daily News, Gel Software announced on August 18 that Lu Haitian plans to reduce his holdings by no more than 4.65 million shares, accounting for 1.9996% of the total share capital, between September 10 and December 9 due to “personal capital needs.”
The reduction of shares through negotiated transactions will not exceed 2.325 million shares. Lu Haitian currently holds approximately 18.0177 million shares of Gel Software, representing 7.75% of the total share capital. If he reduces his holdings by the maximum amount, it would mean selling approximately 25.8% of his shares, which at the closing price of 14.52 yuan per share on August 19, amounts to around 67.52 million yuan.
On the first trading day after the announcement of the reduction plan, Gel Software’s stock price dropped by 6.98%, reducing its market value to around 3.377 billion yuan.
In 2025, Gel Software’s operating income dropped to 358 million yuan, a decrease of 32.45% compared to the previous year. The net profit attributable to the shareholders of the listed company turned from a profit of 36.8121 million yuan in the previous year to a loss of 84.76 million yuan. After deducting non-recurring gains and losses, the loss reached 105 million yuan.
Gel Software expects a net loss attributable to the parent company of 55 to 80 million yuan in the first half of 2026, and a loss of 70 to 95 million yuan after deducting non-recurring gains and losses.
In response to inquiries from the Shanghai Stock Exchange in March, Gel Software stated that a significant reason for the financial turnaround in 2025 was the tightening of downstream customer information security budgets, leading to a decline in revenue from its core business. According to preliminary estimates at the time, revenue from the core business decreased by 31.8% year-on-year, with a decrease in gross profit of 97.0989 million yuan.
Gel Software’s clients mainly include state departments, local government agencies, military-industrial enterprises, financial institutions, and large and medium-sized enterprises. The company stated that project implementation and payment settlements for these clients are mostly concentrated in the second half of the year, while fixed costs such as personnel salaries are relatively inflexible, leading to losses in the first half of the year.
Some market information platforms categorize Gel Software under various hot concepts such as artificial intelligence, quantum technology, DeepSeek, low-altitude economy, and chips. In 2025, the stock rose by a cumulative 78.88%.
On February 9 this year, Gel Software’s stock price peaked at 28.40 yuan during trading, while on July 21 it hit a low of 12.40 yuan, representing a maximum decline of around 56% over a period of more than five months.
The Economic Daily News has reached out to Gel Software regarding the company’s continued losses, the shareholder’s reduction of holdings, and whether market value management measures will be implemented, However, as of the publication of this report, the company has not responded.