Business Context and Reporting Period
Company: MicroCloud Hologram Inc. (Ticker: HOLO)
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: MicroCloud is a Cayman Islands exempted company operating primarily through subsidiaries in the People's Republic of China (PRC). It provides holographic technology services, including holographic LiDAR solutions for Advanced Driver Assistance Systems (ADAS), holographic digital twin technology, and related software/hardware. The company is an emerging growth company and a foreign private issuer.
Capital Structure: As of December 31, 2025, there were 22,512,360 Class A Ordinary shares and 400,000 Class B Ordinary shares outstanding. A 40-to-1 share consolidation took effect on April 21, 2025.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 (RMB) | 2025 (USD) | 2024 (RMB) |
|---|---|---|---|
| Total Revenue | 403,686,223 | 56,515,732 | 290,297,984 |
| Gross Profit | 85,876,711 | 12,022,667 | 65,446,323 |
| Gross Margin | 21.3% | 21.3% | 22.5% |
| Net Loss | (50,173,603) | (7,024,263) | (64,232,235) |
| Operating Cash Flow | 56,371,190 | 7,891,917 | (98,619,387) |
| Cash & Short-term Investments | 2,742,540,654 | 390,186,184 | 1,577,135,122 |
| Convertible Bonds (Liability) | 45,265,472 | 6,440,000 | - |
Note: USD amounts are translated using the year-end exchange rate of RMB 7.0288 to $1.00.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 39.0% year-over-year (YoY) to RMB 403.7 million.
- Holographic Solutions: Increased 54.6% to RMB 199.3 million, driven by expanded customer demand.
- Holographic Technology Services: Increased 26.7% to RMB 204.4 million, largely attributed to the acquisition of Shanghai Kuosou in 2025.
- Profitability: Net loss narrowed by 21.9% to RMB 50.2 million. This improvement was driven by a significant reduction in Research and Development (R&D) expenses and a shift to positive operating cash flow.
- R&D Expenses: Decreased 67.3% to RMB 57.0 million due to the termination of projects with uncertain market prospects.
- Investment Loss: The company recorded a significant investment loss of RMB 98.4 million (USD 13.8 million) due to fair value changes in short-term investments, contrasting with an investment gain of RMB 42.3 million in 2024.
- Liquidity: Operating cash flow turned positive, providing RMB 56.4 million, compared to a usage of RMB 98.6 million in 2024. Total cash and short-term investments grew to approximately RMB 2.74 billion.
- Financing: The company raised approximately RMB 1.24 billion (USD 176.6 million) through the issuance of convertible bonds in 2025.
Guidance, Outlook, Risks, and Contingencies
Management Commentary and Outlook
Management plans to continue investing in R&D for autonomous driving, 5G, AI, and machine learning technologies. The company aims to expand its application fields beyond automotive into industrial robots, mapping, and smart city initiatives. No specific quantitative financial guidance was provided in the text.
Material Risks
- Internal Control Weaknesses: The company identified a material weakness in internal control over financial reporting due to a lack of sufficient resources and personnel with U.S. GAAP expertise. Remediation measures are underway, but effectiveness is not yet assured.
- Regulatory Risks (PRC & US):
- HFCA Act: Risks of delisting if the PCAOB cannot inspect the company's auditor (Assentsure PAC) due to PRC regulatory positions.
- CSRC Filing: Future overseas offerings require filing with the China Securities Regulatory Commission (CSRC) under new Trial Measures.
- Data Security: Evolving PRC laws (PIPL, Data Security Law) regarding data cross-border transfer and cybersecurity reviews could restrict operations or require delisting.
- Customer Concentration: The top five customers accounted for 48.9% of 2025 revenue, with the largest single customer representing 17.1%.
- Market Adoption: Uncertainty regarding the mass market adoption of LiDAR and holographic technology in the automotive and autonomous driving sectors.
Contingencies
- Litigation: The company and a shareholder (Joyous JD Limited) have initiated litigation against the pre-business combination sponsor, Greenland Asset Management Corporation, alleging breach of investment agreements and misuse of Form S-4. The sponsor has filed a countersuit. The outcome is uncertain.
Key Facts for Investor Verification
- Internal Control Remediation: Verify the progress and effectiveness of remediation measures for the identified material weakness in internal controls over financial reporting.
- Investment Portfolio Valuation: Confirm the fair value and liquidity of the RMB 899 million (USD 128 million) in short-term investments, given the RMB 98 million unrealized loss recorded in 2025.
- Convertible Bond Terms: Review the specific conversion terms, interest rates, and maturity dates of the RMB 45.3 million (USD 6.4 million) in outstanding convertible bonds.
- Regulatory Compliance: Monitor developments regarding the PCAOB's ability to inspect the auditor and any new PRC regulatory actions regarding data security or overseas listings that could impact the Nasdaq listing.
- Customer Retention: Assess the stability of revenue from the top five customers, which comprise nearly half of total revenue.