This article is the 807th original work of Deepdive Atom.

Due to insufficient funds, talent, and aging management, Neusoft Group may find it difficult to rebirth through AI.

Author: Meng Fanliao

Editor: Deepdive Atom Studio

For Neusoft Group, 2024 marked a crucial year for its transformation, as the company announced an all-in strategy towards intelligence in March.

Involving in the construction of smart applications in over 200 central cities across the country, supporting the database management of China's 1.4 billion population, providing social insurance services to over 700 million people, and ensuring the management and operation of 3 trillion yuan in pension funds. Over the past 30 years, Neusoft Group has seized a significant share of the software market by replicating talents in batches. However, with the advent of the intelligent era, the technological strength that Neusoft relies on for survival is no longer as prominent.

From 2019 to 2023, four out of the five years saw net losses, with only one year of slight profits. Facing operational difficulties, major shareholders have chosen to cash out over 300 million shares in the past few years. As a former "leading software stock," Neusoft Group seems to lag behind in R&D investment compared to its peers.

On June 17, 2024, Neusoft's subsidiary, Shenyang Neusoft Zhirui Radiation Therapy Technology Co., Ltd., completed a Series C financing of over RMB 100 million, seemingly indicating market recognition of Neusoft's intelligent strategy. However, compared to its diverse businesses, the progress in smaller niches may not represent the entire Neusoft Group.

In the era of intelligence, can Neusoft Group, which is all-in on AI, regain its former glory?

The more industries it intervenes in, the more energy it consumes.

In 1988, Professor Liu Jiren, a professor at Northeastern University, saw the opportunities in the computer software market and embarked on his entrepreneurial journey. After a series of collaborations and equity integrations, Neusoft Group gradually took shape and successfully listed in 1996, becoming China's first software stock.

With early advantages, Neusoft Group, under Liu Jiren's leadership, can be said to have "dominated" the software market and successfully embarked on a diversification strategy, covering a wide range of businesses including smart cities, healthcare, smart car connectivity, and software products and services. To become a globally excellent IT solution and service provider, Neusoft Group established branches in the United States and Japan from 2000 to 2022.

Before the popularization of mobile internet, Neusoft Group deserved the title of "leading software stock" in terms of technological capabilities and brand influence. However, with the popularization of mobile internet, more and more companies have gained independent R&D capabilities, and an increasing number of service providers based on mobile development have greatly impacted Neusoft Group's fundamental position and significantly reduced its influence.

On the other hand, Neusoft Group's diversification strategy was originally a hedge against declining influence. However, involvement in multiple industries has also brought challenges, especially in terms of resource and energy dispersion. Neusoft Group needs to maintain competitiveness in various fields, but too many fields mean more resources and energy are required, which may lead to insufficient investment in certain areas and affect its performance in those areas.

Previously, to promote the business development of subsidiaries, Neusoft Group continuously acquired new companies. For example, it acquired the Northeastern University Imaging Center to enter the medical sector, and acquired 100% of the shares of Sesca Mobile Software Oy, Almitas Oy, and Sesca Technologies Srl, subsidiaries of Sesca Group Oy engaged in high-end smartphone software development, to enter the field of high-end smartphone software development