Summary of Hengtong Optic-Electric Conference Call Company Overview - **Company**: Hengtong Optic-Electric - **Date**: First half of 2025 Key Points Industry and Company Performance - **Overall Revenue Growth**: Approximately 20% increase in revenue for the first half of 2025 [2][6] - **Core Business Segments**: - **Marine Energy and Communication**: Steady growth with a significant increase in orders [2][4] - **Smart Grid**: Maintained steady development with high order backlog [2][7] - **Industrial and New Energy Intelligence**: Significant growth with ongoing expansion projects [2][8] Market Dynamics - **Marine Business**: Anticipated industry turning point in Q2 2025, with increased market penetration expected [2][4] - **Order Backlog**: Current order backlog is stable at approximately 7.5 billion yuan [2][10] - **Smart Grid Projects**: Focus on expanding aluminum and aluminum alloy new energy projects to meet domestic demand [2][7] Product Development and Innovation - **AI-Driven Technology**: Focus on high-end products such as multimode and hollow-core fibers, with hollow-core fiber loss values reaching ≤ 0.2 dB/km [3] - **Specialty Fiber Growth**: Specialty fibers now account for about 20% of revenue, with significant applications in data centers and communication networks [15][31] Financial Metrics - **Gross Margin**: Marine energy and communication gross margin decreased by 2-3 percentage points, currently between 30% and 35% [27][28] - **Revenue Structure**: Smart grid and industrial new energy segments account for over 50% of total revenue, with smart grid at approximately 40% [12][29] International Expansion - **Overseas Market Growth**: Overseas business accounted for 50% of total optical communication revenue, showing a continuous growth trend [13][30] - **Global Presence**: Operations in various regions including Brazil, South Africa, Germany, and India, with a focus on North American AI data center market [17][20] Future Outlook - **Strategic Focus**: Continued emphasis on marine cables, liquid cooling products, and traditional business growth [36][42] - **Market Confidence**: Strong confidence in future growth in marine energy and communication sectors, with ongoing project developments [21][41] Additional Insights - **Liquid Cooling Technology**: Development of silent liquid cooling products aimed at addressing energy consumption and heat dissipation in data centers [24][25] - **Project Pipeline**: Significant project approvals across multiple provinces, indicating robust future growth potential in marine energy [11][21] This summary encapsulates the key insights and developments from Hengtong Optic-Electric's conference call, highlighting the company's performance, market dynamics, product innovations, and future strategies.

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 26.29 [6][4]. Core Views - The company achieved a revenue of RMB 32.049 billion in H1 2025, representing a year-over-year increase of 20.42%, while the net profit attributable to shareholders was RMB 1.613 billion, up 0.24% year-over-year [1]. - The company is focusing on expanding its business in high-growth areas such as marine energy, communication, optical communication, and smart grid [1]. - The report highlights the company's ongoing development of AI new optical fibers, including the launch of hollow-core anti-resonant optical fibers with advanced loss values [3]. Financial Performance - In H1 2025, the company's gross margin was 13.59%, down 2.96 percentage points year-over-year, primarily due to changes in product mix and rising raw material costs [2]. - The company reported a net profit margin of 5.03% in H1 2025, a decrease of 1.01 percentage points year-over-year [2]. - The company has a backlog of orders amounting to approximately RMB 20 billion for submarine cables and marine engineering products, indicating strong future revenue potential [3]. Profit Forecast and Valuation - The forecasted net profit for the company is RMB 3.242 billion in 2025, RMB 3.893 billion in 2026, and RMB 4.733 billion in 2027 [4]. - The report assigns a 20x PE valuation for 2025, reflecting the company's expansion in the AI new optical fiber sector, with a target price increase from RMB 20.37 to RMB 26.29 [4].

Group 1: Major Contracts and Industry Trends - Jiadian Co., Ltd. announced that its subsidiary, Harbin Electric Power Equipment Co., Ltd., won a bid for the Shandong Haiyang Xinan Nuclear Power Project with a contract value of 608.98 million yuan [1] - Over the past month, more than 130 major contract announcements have been made by listed companies, involving over 60 companies, indicating a robust activity in the infrastructure sector [1] - The infrastructure investment in the first half of the year grew by 4.6% year-on-year, supported by various policies aimed at expanding domestic demand and stabilizing growth [3] Group 2: New Infrastructure Projects - The infrastructure sector is witnessing a surge in large-scale projects, particularly in new energy and communication, alongside traditional projects [2] - Hengtong Optic-Electric recently secured contracts for marine energy projects totaling 1.509 billion yuan, highlighting the growing focus on renewable energy [2] - Companies like Hopu Co. and China Communications Construction Company are also engaging in new infrastructure projects, including solar power and energy storage [2] Group 3: Policy Support and Future Outlook - The completion of the 800 billion yuan "two重" construction project list and the rural road improvement plan are expected to bolster infrastructure development [3] - Analysts believe that there is significant potential for infrastructure projects in various western provinces and sectors like water conservancy and energy [3] Group 4: Emerging Technologies and New Growth Drivers - Companies are increasingly focusing on new technologies such as big data, cloud computing, and semiconductors, as evidenced by contracts in these areas [4] - Qidi Design signed a contract for a computing center project worth approximately 860 million yuan, showcasing the shift towards advanced technology infrastructure [4] - The demand for automation and digital transformation is expected to grow, particularly in the robotics and healthcare sectors [5] Group 5: International Expansion and Opportunities - There has been a notable increase in overseas contracts for listed companies, indicating a strategic push into international markets [7] - Zhongcheng Co. signed a contract for a solar project in Azerbaijan worth about 853 million yuan, while Enjie Co. has secured a supply agreement with LG Energy Solution for lithium battery separators [7] - The enhancement of China's high-end manufacturing capabilities and infrastructure construction is contributing to the competitiveness of Chinese exports [7]

Core Insights - The company reported a revenue of 32.049 billion yuan for the first half of 2025, representing a year-on-year growth of 20.42%, while the net profit attributable to shareholders was 1.613 billion yuan, up 0.24% [1] - In Q2 2025, the company achieved a revenue of 18.781 billion yuan, a year-on-year increase of approximately 26.64%, driven by steady growth in marine energy, communication, ultra-high voltage, and smart grid businesses [1] Group 1: Business Performance - The company's net profit for Q2 2025 was 1.056 billion yuan, a decrease of about 3.63% year-on-year, primarily due to enhanced operational efficiency and a reduction in R&D expense ratio [1] - The company is focusing on deep-sea wind power development and optimizing production capacity at its Jiangsu and Jieyang marine energy bases [2] Group 2: Global Strategy - The company is deepening its global operational strategy, advancing international business in both communication networks and energy interconnection [3] - As of the reporting period, the company had 7.5 billion yuan in orders related to marine communication, indicating a continuous improvement in cross-ocean communication system integration capabilities [3] Group 3: Investment Outlook - The company remains focused on creating value in the communication and energy sectors, providing industry-leading products and solutions [4] - Expected net profits for 2025-2027 are projected to be 3.330 billion, 3.706 billion, and 4.079 billion yuan, with corresponding growth rates of 20%, 11%, and 10% [4]

Group 1 - The 6G concept sector rose by 2.92%, ranking 9th among concept sectors, with 61 stocks increasing, including notable gainers like TeFa Information, China Satellite, and Jingwang Electronics reaching their daily limit up [1] - Major inflows were seen in the 6G concept sector, with a net outflow of 517 million yuan, while 34 stocks experienced net inflows, with China Satellite leading at 406 million yuan [1] - The top gainers in the 6G concept included TeFa Information with a 10.05% increase, China Satellite at 10.01%, and Jingwang Electronics at 10.00% [2] Group 2 - The net inflow ratios for leading stocks were TeFa Information at 32.25%, China Satellite at 15.38%, and Dahua Intelligent at 11.51% [2] - The trading volume for China Satellite was 40.62 million yuan, with a turnover rate of 6.95% [2] - Other notable stocks with significant net inflows included Hengtong Optic-Electric and Jingwang Electronics, with net inflows of 298 million yuan and 291 million yuan respectively [1][2] Group 3 - The 6G concept sector's performance was contrasted with other sectors, such as Rare Earth Permanent Magnets which rose by 4.88%, while sectors like Horse Racing and Shared Bicycles saw declines [1] - Stocks like Chongda Technology, Liyuan Information, and ZTE Corporation faced declines of 3.06%, 2.42%, and 1.53% respectively [1][5] - The overall market sentiment reflected a mixed performance across various sectors, with significant fluctuations in stock prices [1][5]

Group 1 - The Terahertz concept sector increased by 3.01%, ranking 7th among concept sectors, with 13 stocks rising, including Changfei Optical Fiber which hit the daily limit, and Tianyin Electromechanical, Chuangyuan Xinke, and Hengtong Optic-Electric showing significant gains of 9.17%, 8.48%, and 7.96% respectively [1] - The Terahertz concept sector experienced a net outflow of 935 million yuan, with 10 stocks seeing net inflows, and 5 stocks receiving over 100 million yuan in net inflows, led by Hengtong Optic-Electric with a net inflow of 298 million yuan [2] - In terms of capital inflow ratios, Changfei Optical Fiber, Shenglu Communication, and Hengtong Optic-Electric had the highest net inflow rates at 36.14%, 10.11%, and 9.21% respectively [3] Group 2 - The top gainers in the Terahertz concept included Hengtong Optic-Electric with a 7.96% increase, and Tianyin Electromechanical with a 9.17% increase, while the top losers included Taihao Technology with a 3.04% decrease [4] - The overall performance of the Terahertz concept was part of a broader market trend, with various sectors experiencing mixed results, such as Rare Earth Permanent Magnets rising by 4.88% and the Horse Racing concept declining by 0.49% [2]

Group 1 - Hengtong Optic-Electric (600487.SH) reported its semi-annual results for 2025, with 69 institutional investors holding a total of 844 million shares, representing 34.23% of the company's total equity as of August 25, 2025 [1] - The top ten institutional investors collectively hold 31.98% of Hengtong Optic-Electric's shares, with a 0.51 percentage point increase compared to the previous quarter [1] Group 2 - In the public fund sector, 10 funds increased their holdings, accounting for a 0.34% increase, while 12 funds decreased their holdings, representing a 0.13% decrease [2] - A total of 27 new public funds were disclosed this period, including several focused on high-end manufacturing and environmental themes [2] - Two new insurance investors were disclosed this period, both traditional insurance products from major insurance companies [2]

Investment Rating - The report maintains a "Strong Buy" rating for the company [3]. Core Views - The company reported a revenue of 32.049 billion yuan for the first half of 2025, representing a year-on-year growth of 20.42%. The net profit attributable to shareholders was 1.613 billion yuan, with a slight increase of 0.24% year-on-year [1]. - The company is focusing on expanding its capabilities in deep-sea wind power and enhancing its leadership position in marine energy interconnection. It is actively involved in new infrastructure projects under the national marine power strategy [7]. - The company is advancing its global operations strategy, with simultaneous developments in cross-ocean communication and energy interconnection. As of the report date, the company had 7.5 billion yuan in orders related to marine communication and approximately 20 billion yuan in energy interconnection projects [7]. Financial Data and Valuation - The company is projected to achieve total revenue of 66.808 billion yuan in 2025, with a year-on-year growth of 11%. The net profit attributable to shareholders is expected to reach 3.330 billion yuan, reflecting a growth of 20% [2][15]. - The earnings per share (EPS) is forecasted to be 1.35 yuan in 2025, with a price-to-earnings (PE) ratio of 15.0 [2][15]. - The company’s total assets are estimated to be 63.152 billion yuan in 2025, with a debt-to-asset ratio of 46.4% [13][15]. Performance Metrics - The company achieved a gross margin of 13.1% and a net margin of 5.0% in 2025 [15]. - The return on equity (ROE) is projected to be 11.1% in 2025, indicating a strong profitability outlook [15]. - The company has a total market capitalization of approximately 49.9 billion yuan, with a circulating market value of 49.4 billion yuan [3].

公司代码：600487 公司简称：亨通光电 第一节 重要提示 1.1本半年度报告摘要来自半年度报告全文，为全面了解本公司的经营成果、财务状况及未来发展规 划，投资者应当到www.sse.com.cn网站仔细阅读半年度报告全文。 1.2本公司董事会、监事会及董事、监事、高级管理人员保证半年度报告内容的真实性、准确性、完整 性，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和连带的法律责任。 1.3公司全体董事出席董事会会议。 无 第二节 公司基本情况 2.1公司简介 ■ 2.2主要财务数据 单位：元 币种：人民币 ■ 2.3前10名股东持股情况表 单位: 股 1.4本半年度报告未经审计。 1.5董事会决议通过的本报告期利润分配预案或公积金转增股本预案 ■■ 2.4截至报告期末的优先股股东总数、前10名优先股股东情况表 □适用 √不适用 2.5控股股东或实际控制人变更情况 □适用 √不适用 2.6在半年度报告批准报出日存续的债券情况 □适用 √不适用 第三节 重要事项 公司应当根据重要性原则，说明报告期内公司经营情况的重大变化，以及报告期内发生的对公司经营情 况有重大影响和预计未来会有重大影响的事项 □适用 √ ...

Core Points - The company held its ninth board meeting on August 22, 2025, where four key proposals were reviewed and approved [1][2][3] Group 1: Financial Reports - The board approved the full and summary reports for the first half of 2025, with unanimous support from all 12 attending directors [1] - The board also approved the risk assessment report for Hengtong Financial Co., Ltd. for the first half of 2025, again with unanimous support [2] Group 2: Related Party Transactions - The board approved the proposal for additional expected related party transactions for 2025, with 5 votes in favor and the related directors abstaining from the vote [2] Group 3: ESG Reporting - The board approved the 2024 Environmental, Social, and Governance (ESG) report, with unanimous support from all 12 attending directors [3]