Recently, Beijing New Space Technology Co., Ltd. announced a halt in trading of its shares starting October 9, due to plans to issue shares and pay cash for asset acquisitions, along with raising supporting funds. This hints that the lighting engineering company may venture into the semiconductor storage sector. This is not the first time for Beijing New Space to cross into new areas; in 2023, it acquired a smart parking business, Jia'anbo, in hopes of finding new growth points. However, the new business has failed to improve company operations and has led to goodwill impairment due to Jia'anbo's projected losses in 2024, further dragging down performance.

It is noteworthy that prior to this announcement, Beijing New Space's stock price was on an upward trend, having risen 53% in September 2025, with a notable surge just before the announcement. This performance starkly contrasts with the company's continuous losses in recent years. Similarly, in July 2025, a significant price spike occurred before a control change announcement.

In terms of financial performance, Beijing New Space has faced dire conditions, reporting net losses of 1.8 million, 209 million, 207 million, 262 million, and 66 million in the years 2021-2024 and the first half of 2025, accumulating over 700 million in losses. Additionally, the difficulty in collecting payments remains a significant challenge.

Founded in 2004, Beijing New Space specializes in integrated services for lighting engineering, aiming to provide professional solutions for night lighting in outdoor public spaces and various scenic spots. However, the company has been struggling, reporting declining revenues from 896 million to 203 million and further to 144 million from 2020 through the first half of 2025, marking substantial year-on-year declines.

The company's profitability has also worsened, with the gross margin falling from 27.87% in H1 2023 to 18.26% in H1 2025. Alarmingly, the gross margin plummeted to 8.52% in Q2. Meanwhile, the net profit margin has remained negative since H1 2022, showing continued declines through H1 2025.

In its 2025 H1 performance forecast, the company explained that "the industry has not seen significant changes, while project development and signing cycles have extended, leading to slow revenue conversion. The intense competition in the industry has also resulted in lowered gross margins for signed projects."

The issues surrounding accounts receivable have become a major operational risk. The proportion of accounts receivable to operating income for the company exceeds industry averages, reaching 279.99% in H1 2025. Moreover, the quality of these receivables is concerning, with 86.44% over one year old by the end of 2024, coupled with an extremely low accounts receivable turnover rate.

These severe collection issues adversely affect multiple aspects of Beijing New Space's operations, impacting profitability and cash flow significantly.

Despite facing challenges in its main business, Beijing New Space attempted a transformation by acquiring Jia'anbo in 2023. However, the performance did not meet expectations, leading to goodwill impairment, largely stemming from Jia'anbo's dismal performance against profit commitments set for 2023 to 2025.

Beijing New Space has not seemed to learn from its high-premium acquisitions. Instead, it has continued to push for more acquisitions, recently announcing plans to purchase storage chip company Jiahe Jingwei in a significant restructuring effort, despite the lack of overlap with its original business.

With Jiahe Jingwei's focus on firmware and design for storage chips deployed in various technology sectors, the technical and operational gaps between the two companies are pronounced. The acquisition announcement did not clarify the integration process post-transaction or whether professionals with semiconductor industry backgrounds would join the management team, raising concerns about the potential for success.

Despite two bold moves in 2025 failing to materially boost operational performance, the stock has been notably active in the capital market, having risen 52.92% since September. The stock's unusual activity frequently coincides with the announcements of restructuring, casting doubt on the organic nature of this market reaction.