Increasing revenue without increasing profit, Haochen Software is expanding overseas through land grabbing.

What Is the Extent of Competitive Improvement in the 3D CAD Market After AI · the Merger With CadLine?

Reporter Lei Chen from 21st Century Business Herald

In 2025, in the global CAD software market, three international manufacturers—Dassault, Siemens, and PTC—hold a dominant position in the high-end 3D design segment. A domestic software vendor from Suzhou is attempting to enter this market, which has long been occupied by international firms, through mergers and acquisitions and overseas expansion.

Recently, HAOCHEN Software (688657.SH) disclosed its 2025 annual report. This domestic software company, which has been deeply focused on the CAD field for more than 20 years, delivered its performance for the second full fiscal year after listing: revenue reached RMB 330 million, up nearly 15% year on year, while net profit attributable to shareholders was RMB 50.8016 million, down 19.36% year on year.

Revenue growth and profit decline occurring at the same time reflect a mismatch between the company’s cost investments and phased returns during its 3D CAD layout and overseas market expansion process.

In the four quarters of 2025, HAOCHEN Software’s net profit attributable to shareholders was RMB 6.8639 million, RMB 19.6931 million, RMB 14.9956 million, and RMB 9.249 million, respectively. In the fourth quarter, profit fell 38.3% quarter over quarter compared with the third quarter, while that quarter’s revenue was the highest for the year at RMB 102 million.

The direct cause of the profit pressure comes from the comprehensive rise in costs and expenses.

During the reporting period, the company’s selling expenses, administrative expenses, and R&D expenses reached RMB 136 million, RMB 46.2634 million, and RMB 92.6851 million, respectively, with year-on-year growth rates of 18.06%, 29.81%, and 10.09%. The combined proportion of these three expenses to operating revenue increased from 71.8% in 2024 to 76.3% in 2025.

It is worth noting that although R&D investment as a percentage of operating revenue fell slightly from 29.13% in 2024 to 27.91% in 2025, the absolute figure still remained at a high level. The number of R&D personnel increased from 300 to 315, and the average compensation for R&D personnel rose from RMB 273,800 to RMB 291,600. Among the 12 in-progress projects the company is advancing, projects such as R&D of the AI-CAD 2025 new product and special efforts to tackle core CAD technologies are all within their R&D cycles.

Contrasting with the decline in profits, the company’s net cash flow from operating activities has been impressive. During the reporting period, this indicator reached RMB 91.6128 million, surging 37.85% year on year—nearly double the net profit for the period. Subtotal cash inflows from operating activities were RMB 406 million; among them, cash received from the sale of goods and the provision of services was RMB 359 million, up 14.3% year on year, broadly matching the revenue growth rate. The company explained that the increase in cash flow was mainly due to the implementation of growth strategies across business segments and the visible effects of prior measures, which drove revenue growth.

By business segment, all three main business lines recorded year-on-year growth: software business revenue was RMB 213 million, up 13.69%; cloud-based business revenue was RMB 67.3298 million, up 28.64%; and internet advertising and promotion business revenue was RMB 46.4161 million, up 3.51%. Among them, the cloud-based business had the fastest growth rate, and its gross margin also increased by 1.18 percentage points to 89.78%.

As for dividends, the 2025 profit distribution proposal approved by the board shows that the company plans to pay a cash dividend of RMB 6 for every 10 shares (inclusive of tax) and to increase 4.6 shares by capitalizing surplus. The amount of cash dividends accounts for 76.78% of the net profit attributable to shareholders for the current year; if the repurchase amount of shares is added, the total dividend payout ratio reaches 96.71%.

While consolidating the domestic market, HAOCHEN Software’s overseas business is becoming an important engine for revenue growth.

The annual report data shows that in 2025, the company’s overseas revenue reached RMB 133 million, up 25.88% year on year. Its proportion of main business revenue increased from 37.1% in 2024 to 40.7%. Meanwhile, revenue from domestic business grew by 8.28% in the same period, so the overseas business grew at more than three times the domestic growth rate.

Behind this growth, the company’s overseas marketing network continues to expand. By the end of the reporting period, the company’s offline marketing network covered more than 100 countries and regions worldwide, and it has established stable cooperation relationships with more than 70 distributors. The product portfolio covers markets such as South Korea, Japan, Poland, India, Thailand, Turkey, Brazil, Italy, and Portugal. During the reporting period, in Europe—an area with relatively high business maturity—the company piloted a shift from product distribution to comprehensive brand marketing, and European-area revenue increased significantly year on year.

The gross margin of overseas business also performed better than that of domestic operations. In 2025, the overseas business gross margin was 95.73%, higher than the domestic business’s 90.64%. From the perspective of sales models, the gross margin under the distribution model reached 96.77%, significantly higher than 91.04% under the direct sales model.

It is worth noting that the expansion of overseas business also came with higher cost inputs. Promotion and advertising expenses included in selling expenses increased from RMB 23.79 million in 2024 to RMB 31.11 million, an increase of more than 30%. The company also fully strengthened global brand market promotion during the reporting period by organizing multi-tier user exchange events, continuing to carry out customer satisfaction surveys, strengthening the dissemination of professional media, and promoting typical customer case studies.

The rapid growth of the overseas business is also closely related to the policy environment of the global CAD market. The annual report cited industry analysis indicating that several European countries have issued BIM mandates. The United Kingdom, Italy, Germany, and others have explicitly required that certain public projects above a specified scale must adopt BIM technology, and emerging markets in Southeast Asia are also quickly following suit. This policy environment both raises market entry thresholds and implies greater commercial space.

In the 2D CAD field, HAOCHEN Software has already built a relatively solid foundation for independent, controllable development. The annual report shows that since 2010, the company has rebuilt the software architecture of HAOCHEN CAD, getting rid of the limitations of R&D based on ITC source code, achieving full independence of the platform’s core technologies. Some key technical indicators have already approached or reached international advanced levels. During the reporting period, HAOCHEN CAD completed 5 version updates, including multiple versions adapted for HarmonyOS, macOS, and Linux systems, continuously enhancing cross-platform compatibility.

At the user level, the company’s products cover more than 75% of the enterprises included in the 2025 central state-owned enterprise directory released by the State-owned Assets Supervision and Administration Commission of the State Council, including China Aerospace Science and Industry Corporation, China Power Construction, State Grid, and other central state-owned enterprises or their subsidiaries.

However, a stable 2D market alone is not enough to support the company’s participation in the global top-tier competition. In the areas of 3D CAD and BIM, the industry analysis cited in the annual report indicates that Dassault, Siemens, and PTC occupy a dominant position globally, and each has formed deep barriers in sub-sectors such as aerospace, machinery manufacturing, and shipbuilding. According to data from Future Market Insights, the global CAD market size is expected to reach RMB 12.2 billion in 2025. Among it, 3D CAD and BIM—high value-added areas—have long been dominated by international giants.

It is against this backdrop that in April 2025, HAOCHEN Software spent RMB 47.73 million to complete the full acquisition of CadLine, a Hungarian company, acquiring into its portfolio the BIM core product ARCHLine.XP. During the reporting period, CadLine contributed RMB 8.8213 million in operating revenue and RMB 2.442 million in net profit, initially achieving profitability. Based on this, the company launched the HAOCHEN BIM and AEC design software suite, initially completing its 3D CAD product layout in the engineering design field.

But the merger and acquisition also brought significant changes in certain financial indicators. By the end of 2025, the company’s balance of intangible assets surged from RMB 2.2674 million in the same period of the previous year to RMB 46.9388 million, an increase of 1970.14%; goodwill increased by RMB 1.0657 million.

It is worth noting that the company’s pace of acquisitions has not stopped. The “Commitments and Contingencies” section of the annual report discloses that as of the end of the reporting period, HAOCHEN Software has signed agreements with related parties such as Metaworld Corporation and ZiQian Technology. The company plans to use its own funds of RMB 60 million to subscribe for preferred shares of the controlling entity of ZiQian Technology, indirectly holding 8.45% equity in ZiQian Technology. The annual report shows that this transaction is in the process of preparation and advancement for closing and has not yet completed the closing.