Recently, Cambricon, a frontrunner in the AI chip sector, revealed that its plan to utilize 2.778 billion yuan from its parent company's capital reserves to offset accumulated losses has received the green light. Based on the 2024 audit report issued by Pan-China Certified Public Accountants, as of December 31, 2024, the parent company's financial statements showed accumulated undistributed profits of -2.778 billion yuan, with surplus reserves ending at 0 yuan and capital reserves at 9.625 billion yuan. Cambricon intends to allocate 2.778 billion yuan from the parent company's capital reserves to offset the parent company's accumulated losses, specifically to bring the negative undistributed profits of the parent company at the end of 2024 down to zero. Once this capital reserve loss compensation scheme is put into action, the parent company's accounting statements will reflect surplus reserves of 0 yuan, a reduction in capital reserves to 6.846 billion yuan, and undistributed profits being adjusted to 0 yuan. Cambricon clarified that this strategic move is designed to alleviate the weight of historical losses, bolster its capacity to deliver value to investors, and foster the company's high-caliber growth. Indeed, following the introduction of the updated Company Law last year and the subsequent release of pertinent notices by the Ministry of Finance in June of this year, numerous listed companies have declared their intentions to tap into capital reserves to mitigate losses.