# Yonyou Network Technology (600588.SHG)

Canonical: https://gigainvestors.com/s/600588.SHG

Analysis as of: 2026-10-16T07:37:35.993Z. Financial observations: FY1998–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: CNY 9.57 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 3

- Operating margin variation: 6.25×

Chart: Operating margin; fiscal year observations.

- FY2016: -0.01×

- FY2017: 0.11×

- FY2018: 0.12×

- FY2019: 0.17×

- FY2020: 0.13×

- FY2021: 0.09×

- FY2022: 0.03×

- FY2023: -0.09×

- FY2024: -0.23×

- FY2025: -0.12×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 11.1pp below the typical margin (limit 4pp)

- ROIC, median of available years: 7.6%

- ROIC, second-lowest year: -13.1%

- Typical minus recent gross margin: 11.1 pp

- Typical gross margin (annual median): 60.8%

- Recent gross margin (lower of latest and 3-year median): 49.6%

- Years with nonpositive capital: 0

- Capital spending / revenue: 9.3%

- ROIC including acquisitions, ten-year median: 4.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: -1.5%

- FY2017: 11.5%

- FY2018: 22.3%

- FY2019: 40.3%

- FY2020: 32.1%

- FY2021: 17.0%

- FY2022: 3.8%

- FY2023: -12.0%

- FY2024: -27.1%

- FY2025: -13.1%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY -7.2B

- Net income, five-year total: CNY -3.5B

- Return on incremental invested capital: -16.5%

- Working capital / revenue, annual change: 0.9 pp

- Working capital / revenue, change between three-year averages: 5.8 pp

- Working capital / revenue, final three-year average: 27.3%

Chart: Owner earnings · five years; fiscal year observations.

- FY2021: CNY 248M

- FY2022: CNY -688M

- FY2023: CNY -1.8B

- FY2024: CNY -3.6B

- FY2025: CNY -1.3B

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 11.5% vs -13.1%

- Per-share earnings: 0.10 to -0.41 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.7%

- Ordinary dilution, 5-year annual growth: 1.0%

- Market cap gain: CNY 13B

- Cumulative retained earnings: CNY -3.9B

- Diluted shares, 10-year annual growth: 0.7%

- Diluted shares, 5-year annual growth: 1.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: CNY -0.51

- Per-share value, starting three-year median: CNY 0.10

- Per-share value, ending three-year median: CNY -0.41

- Buybacks concentrated in cheaper years (correlation): -0.43

- Average buyback yield: 0.6%

- Buyback history: 9 years

- Debt-funded buybacks: Yes

- Acquisition spending: CNY 4.2B

- Cumulative net income, 10 years: CNY -124M

- ROIC, first three-year median: 11.5%

- ROIC, last three-year median: -13.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 0.06

- FY2017: CNY 0.13

- FY2018: CNY 0.19

- FY2019: CNY 0.36

- FY2020: CNY 0.31

- FY2021: CNY 0.19

- FY2022: CNY 0.06

- FY2023: CNY -0.29

- FY2024: CNY -0.62

- FY2025: CNY -0.41

### accounting: pass

- Sloan accruals: -10.2%

- Receivables to sales index (DSRI): 0.61×

- Restructuring years, last five: 0

- Earnings backed by cash: Yes

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.76×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -5.7%

- FY2017: -7.4%

- FY2018: -9.4%

- FY2019: -2.0%

- FY2020: -3.7%

- FY2021: -3.4%

- FY2022: -0.3%

- FY2023: -3.4%

- FY2024: -7.4%

- FY2025: -10.2%

## Holders

## Price story

Down 73% since Dec 2021 · sales +0.3%

Story as of 2026-10-16T10:00:09.278Z; price observation 2026-10-15.

### Sales · FY2024–2025

sales +0.3%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 5.1B 

- FY2017: CNY 6.3B 

- FY2018: CNY 7.7B 

- FY2019: CNY 8.5B 

- FY2020: CNY 8.5B 

- FY2021: CNY 8.9B 

- FY2022: CNY 9.3B 

- FY2023: CNY 9.8B 

- FY2024: CNY 9.2B 

- FY2025: CNY 9.2B 

### Gross margin · FY2025

gross margin 49.6%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 68.6% 

- FY2017: 71.4% 

- FY2018: 69.8% 

- FY2019: 65.4% 

- FY2020: 60.4% 

- FY2021: 61.1% 

- FY2022: 56.3% 

- FY2023: 50.6% 

- FY2024: 47.5% 

- FY2025: 49.6% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software application; annual sales are CNY 9.2 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); FY2025: revenue 9181696358; grossProfit 4555699283; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 600588.SHG: Yonyou Network Technology Co.,Ltd., together with its subsidiaries, provides digital software and services to enterprises and public organizations in China and internationally. The company operates YonBIP, a business innovation platform that offers cloud services; and Chanjet, which provides digital finance, taxation, and digital business cloud services, as well as provides community and customer support services. It is also involved in the sale of computer software, hardware, consumables, printing paper, books, and electronics; property management; advertising; leasing of office space; internet data centers; information services; technical and business management consulting; technical exchange and training services; computer software development services; technology promotion and application services; computer system integration; financial investment; software and information technology services; computing software; investment management and consulting; insurance; business services; and internet access and related services. The company serves state-owned assets supervision and investment holding, equipment and discrete manufacturing, process manufacturing, consumer goods, service, transportation and utilities, construction and real estate, pharmaceuticals, healthcare, tobacco, finance, automobiles and other industries. The company was formerly known as UFIDA Software Co., Ltd. and changed its name to Yonyou Network Technology Co.,Ltd. in January 2015. Yonyou Network Technology Co.,Ltd. was founded in 1988 and is headquartered in Beijing, China.

### Why customers stay

Margins ranged from 47.5% to 50.6% during 2023–25; it earns 7.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); FY2023: grossProfit / revenue = 50.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); FY2024: grossProfit / revenue = 47.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); FY2025: grossProfit / revenue = 49.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); 10-year return on capital observations [[2016,-0.014793491988315772],[2017,0.11509967103588813],[2018,0.22331919335480088],[2019,0.4025958526605111],[2020,0.32065917035234187],[2021,0.16958104657027326],[2022,0.037650568786949966],[2023,-0.1195419252476312],[2024,-0.2714866225633521],[2025,-0.13144105508186163]]; median 0.07637511991141904. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); FY2016: growth capex 173534599; upkeep 166766846; owner earnings 197391725. Growth capex / owner earnings = 0.8791381654930064.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); FY2017: growth capex 259135128; upkeep 195306947; owner earnings 389080894. Growth capex / owner earnings = 0.6660186403293296.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); FY2018: growth capex 369292478; upkeep 117663984; owner earnings 612130382. Growth capex / owner earnings = 0.603290555181102.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); FY2019: growth capex 63594568; upkeep 312121000; owner earnings 1182990000. Growth capex / owner earnings = 0.05375748569303206.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); FY2020: growth capex 6473867.791799307; upkeep 585055496.2082007; owner earnings 735290538.7917993. Growth capex / owner earnings = 0.008804503050504245.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); FY2021: growth capex 128727857.64149082; upkeep 900942113.3585092; owner earnings 247602318.24149084. Growth capex / owner earnings = 0.5198976267901511.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); Dividend observations: [[2016,331422089],[2017,349268845],[2018,420540137],[2019,474413036],[2020,646048122],[2021,650525515],[2022,339232231],[2023,203575005],[2024,188475864],[2025,169129657]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 48.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 600588.SHG SharesStats.PercentInsiders = 48.791000000000004 percentage points; cache date 2026-10-16.

### What the price says

The price is 3.5 times annual sales; cash earnings are negative.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:37:35.993Z); Closing price 9.57 CNY; reporting-to-trading FX 1; FY2025 annual sales per share 2.7097856359735704; price multiple 3.531644670690601. FY2025 cash earnings/share -0.3910053809501736. Closing-price date 2026-10-15.

## Monthly share-price history (CNY per share)

- 2016-11: CNY 11.29 per share

- 2016-12: CNY 9.48 per share

- 2017-01: CNY 8.69 per share

- 2017-02: CNY 8.74 per share

- 2017-03: CNY 8.10 per share

- 2017-04: CNY 7.80 per share

- 2017-05: CNY 6.90 per share

- 2017-06: CNY 7.79 per share

- 2017-07: CNY 8.17 per share

- 2017-08: CNY 9.50 per share

- 2017-09: CNY 10.77 per share

- 2017-10: CNY 10.56 per share

- 2017-11: CNY 9.33 per share

- 2017-12: CNY 9.63 per share

- 2018-01: CNY 10.47 per share

- 2018-02: CNY 14.92 per share

- 2018-03: CNY 17.38 per share

- 2018-04: CNY 16.74 per share

- 2018-05: CNY 14.56 per share

- 2018-06: CNY 14.50 per share

- 2018-07: CNY 15.27 per share

- 2018-08: CNY 16.50 per share

- 2018-09: CNY 16.46 per share

- 2018-10: CNY 14.20 per share

- 2018-11: CNY 13.99 per share

- 2018-12: CNY 12.60 per share

- 2019-01: CNY 14.25 per share

- 2019-02: CNY 18.03 per share

- 2019-03: CNY 20.06 per share

- 2019-04: CNY 18.68 per share

- 2019-05: CNY 17.56 per share

- 2019-06: CNY 20.68 per share

- 2019-07: CNY 22.12 per share

- 2019-08: CNY 24.67 per share

- 2019-09: CNY 23.76 per share

- 2019-10: CNY 22.75 per share

- 2019-11: CNY 21.35 per share

- 2019-12: CNY 21.85 per share

- 2020-01: CNY 25.05 per share

- 2020-02: CNY 35.43 per share

- 2020-03: CNY 31.12 per share

- 2020-04: CNY 35.69 per share

- 2020-05: CNY 34.90 per share

- 2020-06: CNY 44.10 per share

- 2020-07: CNY 47.02 per share

- 2020-08: CNY 41.91 per share

- 2020-09: CNY 38.21 per share

- 2020-10: CNY 43.15 per share

- 2020-11: CNY 43.70 per share

- 2020-12: CNY 43.87 per share

- 2021-01: CNY 43.09 per share

- 2021-02: CNY 36.90 per share

- 2021-03: CNY 35.71 per share

- 2021-04: CNY 33.20 per share

- 2021-05: CNY 36.25 per share

- 2021-06: CNY 33.26 per share

- 2021-07: CNY 35.80 per share

- 2021-08: CNY 33.50 per share

- 2021-09: CNY 33.13 per share

- 2021-10: CNY 31.80 per share

- 2021-11: CNY 32.54 per share

- 2021-12: CNY 35.88 per share

- 2022-01: CNY 34.91 per share

- 2022-02: CNY 31.35 per share

- 2022-03: CNY 22.90 per share

- 2022-04: CNY 19.14 per share

- 2022-05: CNY 19.36 per share

- 2022-06: CNY 21.71 per share

- 2022-07: CNY 20.85 per share

- 2022-08: CNY 20.09 per share

- 2022-09: CNY 17.60 per share

- 2022-10: CNY 24.44 per share

- 2022-11: CNY 22.91 per share

- 2022-12: CNY 24.17 per share

- 2023-01: CNY 24.51 per share

- 2023-02: CNY 23.28 per share

- 2023-03: CNY 25.15 per share

- 2023-04: CNY 21.61 per share

- 2023-05: CNY 19.88 per share

- 2023-06: CNY 20.50 per share

- 2023-07: CNY 18.87 per share

- 2023-08: CNY 18.15 per share

- 2023-09: CNY 16.62 per share

- 2023-10: CNY 16.37 per share

- 2023-11: CNY 16.71 per share

- 2023-12: CNY 17.79 per share

- 2024-01: CNY 11.19 per share

- 2024-02: CNY 12.67 per share

- 2024-03: CNY 11.95 per share

- 2024-04: CNY 11.64 per share

- 2024-05: CNY 11.25 per share

- 2024-06: CNY 10.00 per share

- 2024-07: CNY 9.58 per share

- 2024-08: CNY 8.71 per share

- 2024-09: CNY 11.50 per share

- 2024-10: CNY 11.40 per share

- 2024-11: CNY 13.22 per share

- 2024-12: CNY 10.73 per share

- 2025-01: CNY 10.91 per share

- 2025-02: CNY 15.25 per share

- 2025-03: CNY 15.06 per share

- 2025-04: CNY 14.59 per share

- 2025-05: CNY 13.05 per share

- 2025-06: CNY 13.37 per share

- 2025-07: CNY 15.84 per share

- 2025-08: CNY 16.47 per share

- 2025-09: CNY 15.62 per share

- 2025-10: CNY 15.60 per share

- 2025-11: CNY 14.26 per share

- 2025-12: CNY 13.26 per share

- 2026-01: CNY 15.18 per share

- 2026-02: CNY 14.22 per share

- 2026-03: CNY 11.64 per share

- 2026-04: CNY 11.68 per share

- 2026-05: CNY 10.37 per share

- 2026-06: CNY 9.18 per share

- 2026-07: CNY 11.08 per share

- 2026-08: CNY 10.29 per share

- 2026-09: CNY 9.22 per share

- 2026-10: CNY 9.59 per share

## Annual estimated value (CNY per share)

- FY2016: low CNY 1.98 per share, central CNY 2.07 per share, high CNY 2.19 per share

- FY2017: low CNY 2.73 per share, central CNY 3.03 per share, high CNY 3.32 per share

- FY2018: low CNY 3.49 per share, central CNY 3.99 per share, high CNY 4.37 per share

- FY2019: low CNY 4.07 per share, central CNY 4.58 per share, high CNY 4.99 per share

- FY2020: low CNY 4.61 per share, central CNY 5.84 per share, high CNY 6.55 per share

- FY2021: low CNY 3.37 per share, central CNY 3.66 per share, high CNY 4.05 per share

- FY2022: low CNY 4.49 per share, central CNY 4.87 per share, high CNY 5.30 per share

- FY2023: low CNY 2.98 per share, central CNY 3.10 per share, high CNY 3.27 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.