Core Viewpoint - Jiangsu Hengtong Optic-Electric Co., Ltd. won the China Quality Award, marking a significant recognition of its innovative "Four Full and Two Sides" quality management model, which has driven the company's transformation towards high-end, intelligent, and green development [1][3]. Group 1: Quality Management and Innovation - The "Four Full and Two Sides" quality management model is a culmination of years of practice and exploration in quality management, enabling Hengtong to break foreign monopolies and fill domestic gaps in key core technologies [3]. - Hengtong successfully developed China's first independently patented optical fiber preform, ending over 20 years of reliance on imports and significantly reducing the price of optical fibers from nearly 2000 yuan per kilometer to several dozen yuan [3]. - The company has achieved breakthroughs in deep-sea communication technology, addressing three major global challenges and contributing to national initiatives for a strong network and maritime power [3]. Group 2: Business Performance and Future Plans - Hengtong is implementing a "Digital Navigation" plan for comprehensive digital quality management, establishing a lighthouse factory recognized as a global leader in smart manufacturing within the optical communication industry [3]. - The company continues to strengthen its full industry chain ecosystem in the communication sector and has introduced new products like hollow core anti-resonant optical fibers [5]. - In the first half of 2025, Hengtong reported a revenue of 32.049 billion yuan, a year-on-year increase of 20.42%, and a net profit of 1.571 billion yuan, reflecting a growth resilience [5].

Core Points - The fifth China Quality Award was announced on September 16, recognizing organizations and individuals for their contributions to quality management and improvement [1] - Jiangsu Hengtong Optic-Electric Co., Ltd., a subsidiary of Hengtong Group, won the award for its unique "Four Full and Two Faced" quality management model, marking a significant achievement for private enterprises in Suzhou [1][2] - The China Quality Award aims to honor those making outstanding contributions to building a quality-oriented nation, showcasing innovative quality management practices and improvements in supply quality [1] Company Overview - Hengtong Group has established a "Five High" strategy focusing on high starting point, high technology, high efficiency, high standards, and high levels, viewing quality as the "lifeline" of the enterprise [2] - The "Four Full and Two Faced" quality management model includes full-stack self-research for core technology, full digital empowerment of quality management, comprehensive quality infrastructure, and a quality ecosystem across the entire value chain [2][3] - Hengtong has successfully developed the first domestically produced green fiber preform with independent intellectual property rights, significantly reducing the price of optical fibers and ending over two decades of reliance on imports [2] Industry Impact - The "Four Full and Two Faced" model is being replicated across Hengtong's domestic and international subsidiaries and is being promoted to upstream and downstream enterprises in the industry [3] - Hengtong is implementing a "Digital Navigation" plan, establishing the first "lighthouse factory" in the optical communication industry and a national dual-cross industrial internet platform to enhance quality digital control and drive industrial upgrades [3] - The company aims to deepen its new quality management system and enhance global competitiveness, contributing to the construction of a quality-oriented nation and advancing China's modernization [3]

Group 1 - The terahertz concept sector experienced a decline of 1.34%, ranking among the top declines in concept sectors, with major declines seen in companies like Shenglu Communication, Taihao Technology, and Changfei Fiber [1] - Among the terahertz concept stocks, only two showed an increase, with Aerospace Electronics rising by 1.45% and Shuo Beid by 0.17% [1] - The terahertz concept sector saw a net outflow of 1.363 billion yuan in main funds, with 18 stocks experiencing net outflows, and 7 stocks seeing outflows exceeding 50 million yuan [2] Group 2 - The top net outflow stock in the terahertz concept was ZTE Corporation, with a net outflow of 573 million yuan, followed by Hengtong Optic-Electric and Taihao Technology with net outflows of 222 million yuan and 141 million yuan respectively [2] - The terahertz concept sector's performance was contrasted with other sectors, such as the pork sector which increased by 2.82%, and the military information sector which decreased by 1.35% [2] - The trading volume for ZTE Corporation was 3.11%, with a price drop of 2.31%, indicating significant trading activity despite the decline [3]

Group 1 - The company is conducting special inspections on 10 kV power lines to ensure reliable electricity supply for the quinoa industry, which is heavily reliant on electricity for mechanical harvesting and automated processing [1] - The quinoa planting area in Dulan County has reached 37,500 acres, leveraging the region's high-altitude cool climate and pristine natural environment to develop a modern agricultural model focused on "highland characteristics + green organic" [1] - The company has implemented a "power grid service personnel" mechanism to provide tailored electricity support for quinoa farmers and cooperatives, covering the entire industry chain from planting to processing and sales [1] Group 2 - The online sales of Dulan quinoa are increasing annually, supported by electricity for cold chain storage, vacuum packaging, and live streaming sales, which enhances product freshness and shipping efficiency [2] - The quinoa industry in Dulan County is gradually achieving scale, standardization, and branding, with significant investments in electrical infrastructure to support processing facilities [2]

Core Viewpoint - The company focuses on developing and manufacturing optical modules and comprehensive optical interconnection solutions, aiming to support customers in building high-bandwidth, low-power intelligent optical interconnection networks [1] Group 1: Product Offerings - The company provides a full range of 10G/25G/50G CWDM colored optical modules and BIDI module product solutions for wireless front-haul applications [1] - For government and enterprise network applications, the company offers a complete series of 1.25G/3.125G/10G/25G/50G CWDM module product solutions based on colored optical architecture, as well as GPON/XGSPON OLT optical modules and GPON/XGSPON ONU Stick and Micro ONU access optical module product solutions based on PON architecture [1] - In the broadband PON access application area, the company provides GPON/XGPON/XGSPON and COMBO PON OLT module product solutions, and has launched the 50G COMBO PON OLT asymmetric optical module for the next generation of 50G PON "10G optical network" applications, which meets SFP-DD standard packaging requirements [1] - For computing center application scenarios, the company offers a full range of AOC products from 10G to 400G and high-speed optical module products [1] Group 2: Strategic Focus - The company is actively laying out advanced packaging capabilities for CPO to meet the demands of the next generation of high-speed optical interconnection products [1]

Core Viewpoint - Hengtong Optic-Electric has shown significant stock price growth in 2023, with a year-to-date increase of 22.42% and notable gains over various trading periods, indicating strong market performance and investor interest [2]. Company Overview - Hengtong Optic-Electric, established on June 5, 1993, and listed on August 22, 2003, is located in Suzhou, Jiangsu Province. The company specializes in high-end technology, product research and development, and system integration services in the communication network and energy interconnection sectors, particularly in global submarine cable communication network construction [2]. - The company's revenue composition includes: Smart Grid 36.98%, Copper Conductor 25.02%, Industrial and New Energy Intelligence 11.28%, Optical Communication 10.94%, Marine Energy and Communication 9.57%, Other 5.33%, and Other (Supplementary) 0.88% [2]. Financial Performance - For the first half of 2025, Hengtong Optic-Electric achieved a revenue of 32.049 billion yuan, 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% [2]. - The company has distributed a total of 2.614 billion yuan in dividends since its A-share listing, with 1.121 billion yuan distributed over the past three years [3]. Shareholder Structure - As of June 30, 2025, the number of shareholders for Hengtong Optic-Electric was 161,700, a decrease of 11.80% from the previous period. The average circulating shares per person increased by 13.38% to 15,118 shares [2]. - Major shareholders include Hong Kong Central Clearing Limited, which holds 64.5046 million shares (an increase of 10.1831 million shares), and Southern CSI 500 ETF, holding 29.3348 million shares (an increase of 3.8346 million shares) [3].

Investment Rating - The report maintains a "Buy" rating for the company [4][11]. Core Views - The company is expected to achieve stable revenue growth and maintain profitability, with a target price raised to 26.09 CNY from the previous 22.71 CNY [11]. - The company has a robust order backlog in marine projects and is actively expanding its special optical fiber business [11]. Financial Summary - Total revenue is projected to grow from 47,622 million CNY in 2023 to 96,245 million CNY by 2027, reflecting a compound annual growth rate (CAGR) of approximately 16.4% [3][12]. - Net profit attributable to the parent company is expected to increase from 2,154 million CNY in 2023 to 4,773 million CNY in 2027, with a CAGR of about 20.7% [3][12]. - Earnings per share (EPS) is forecasted to rise from 0.87 CNY in 2023 to 1.94 CNY in 2027 [3][12]. - The return on equity (ROE) is anticipated to improve from 8.4% in 2023 to 12.1% in 2027 [3][12]. Market Data - The company's market capitalization is approximately 49,581 million CNY, with a total share capital of 2,467 million shares [5]. - The stock has traded within a range of 14.16 CNY to 20.90 CNY over the past 52 weeks [5]. Order Backlog and Business Expansion - The company currently holds marine power, marine engineering, and land cable orders totaling around 20 billion CNY, with marine communication-related orders amounting to 7.5 billion CNY [11]. - The acquisition of the German company j-fiber, which has nearly 40 years of experience in special optical fiber production, is expected to enhance the company's capabilities [11].

Core Viewpoint - The company maintains its profit forecast, raises the target price, and retains a buy rating, indicating a positive outlook for future performance [1][2]. Financial Performance - The company reported a revenue of 32.049 billion yuan for the first half of 2025, representing a year-on-year increase of 20.42%. The net profit attributable to shareholders was 1.613 billion yuan, showing a slight increase of 0.24% year-on-year, attributed to a high base from the previous year [2]. - The company maintains a gross margin of 13.56%, which is relatively stable compared to previous periods. However, there is a noted decline in gross margin compared to the same period last year, primarily due to the rapid growth of smart grid, industrial intelligence, and copper conductor businesses, which have increased their share [2]. Order Backlog and Strategic Initiatives - The company currently has a backlog of orders in marine power, marine engineering, and land cable sectors amounting to approximately 20 billion yuan, with marine communication-related orders totaling 7.5 billion yuan, indicating a robust order book [3]. - The company has acquired j-fiber in Germany, which has nearly 40 years of experience in the production of specialty optical fibers. Additionally, the company is expanding its AI advanced optical fiber materials R&D and manufacturing center, with plans for completion by February 2026, aimed at enhancing production capabilities for multimode, multi-core, and hollow-core specialty fibers [3][4].

Group 1: Financial Performance - In H1 2025, the company achieved operating revenue of 32.049 billion yuan, a year-on-year increase of 20.42% [1] - The net profit attributable to shareholders was 1.613 billion yuan, a year-on-year increase of 0.24% [1] - The non-recurring net profit attributable to shareholders was 1.571 billion yuan, a year-on-year increase of 3.69% [1] - In Q2 2025, the company achieved operating revenue of 18.781 billion yuan, a year-on-year increase of 26.64% and a quarter-on-quarter increase of 41.55% [1] - The net profit attributable to shareholders in Q2 2025 was 1.056 billion yuan, a year-on-year decrease of 3.63% but a quarter-on-quarter increase of 89.74% [1] Group 2: Strategic Developments - The company is focusing on global wind energy resources and has secured a substantial order backlog in offshore wind projects [2] - As of June 2025, the company had approximately 20 billion yuan in orders related to underwater cables and marine engineering, and about 7.5 billion yuan in orders for marine communication business [2] - The company participated in significant offshore wind projects, including the first fully operational offshore wind project in Hainan Province [2] Group 3: Innovation and Market Trends - The demand for data centers driven by AI technology is experiencing explosive growth, with global capital expenditure on AI data centers significantly increasing [3] - The company has innovated in low-loss optical fiber and liquid cooling solutions, positioning itself to benefit from the growing data center market [3] - The company launched a new generation of ultra-low-loss optical fiber products and liquid cooling solutions to meet the needs of high-density computing environments [3] Group 4: Investment Outlook - The company is a leading provider of system solutions in the communication and energy sectors, with expected continued performance improvement [4] - Forecasted net profits for 2025-2027 are 3.382 billion, 3.933 billion, and 4.617 billion yuan, respectively, with corresponding EPS of 1.37, 1.59, and 1.87 yuan [4] - The company maintains a "buy" rating based on the anticipated growth in the optical communication and energy internet sectors [4]

Core Viewpoint - Hengtong Optic-Electric experienced a decline in stock price on September 8, 2023, with a drop of 2.04% to 19.69 CNY per share, amidst significant trading activity and net outflow of funds [1][2]. Company Performance - Hengtong Optic-Electric's stock price has increased by 15.89% year-to-date, with a recent decline of 4.93% over the last five trading days, an increase of 11.56% over the last 20 days, and a rise of 31.97% over the last 60 days [2]. - For the first half of 2025, the company reported a revenue of 32.049 billion CNY, representing a year-on-year growth of 20.42%, while the net profit attributable to shareholders was 1.613 billion CNY, showing a slight increase of 0.24% [2]. Business Segments - The company's main business segments include smart grids (36.98%), copper conductors (25.02%), industrial and new energy intelligence (11.28%), optical communication (10.94%), marine energy and communication (9.57%), and others (5.33%) [2]. Shareholder Information - As of June 30, 2025, the number of shareholders decreased by 11.80% to 161,700, with an average of 15,118 shares held per shareholder, which increased by 13.38% [2]. - The company has distributed a total of 2.614 billion CNY in dividends since its A-share listing, with 1.121 billion CNY distributed in the last three years [3]. Institutional Holdings - As of June 30, 2025, Hong Kong Central Clearing Limited is the third-largest circulating shareholder with 64.5046 million shares, an increase of 10.1831 million shares from the previous period [3]. - Southern CSI 500 ETF ranks as the fourth-largest circulating shareholder with 29.3348 million shares, up by 3.8346 million shares [3].