Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company achieved stable performance in H1 2025, with revenue of 14.665 billion yuan, up 2.91% year-on-year, and a net profit attributable to shareholders of 1.621 billion yuan, up 1.34% year-on-year [2] - The company is accelerating its focus on core businesses while exiting low-margin engineering contracting [5] - The overseas business has become a significant growth driver, with revenue increasing by 55.92% year-on-year [2][5] Revenue and Profitability - In H1 2025, the railway sector generated revenue of 8.324 billion yuan, down 7.87% year-on-year, while the urban rail sector saw revenue of 3.916 billion yuan, up 12.85% year-on-year [2] - The overall gross margin for H1 2025 was 28.76%, a decrease of 0.60 percentage points year-on-year [3] - The net profit margin for H1 2025 was 12.70%, down 0.35 percentage points year-on-year [3] Order Growth and Cash Flow - The company signed new contracts totaling 17.568 billion yuan in H1 2025, a decrease of 16.44% year-on-year, primarily due to declines in overseas and engineering contracting [4] - The company’s cash flow from operating activities was -4.405 billion yuan, compared to 2.973 billion yuan in the same period last year, indicating a narrowing of cash outflow in core business activities [4] Strategic Focus - The company is actively exiting the engineering contracting business, with new contracts in this area dropping significantly [5] - The low-altitude economy business is expected to create a new growth curve, with new contracts signed amounting to 30 million yuan in H1 2025 [5]

Core Viewpoint - The company reported its semi-annual performance for 2Q25, showing revenue of 7.996 billion yuan, a year-on-year increase of 2.71%, and a net profit attributable to shareholders of 1.059 billion yuan, up 6.46%, meeting market expectations [1]. Financial Performance - The company's gross margin for 2Q25 was 30.3%, a decrease of 0.94 percentage points year-on-year, while the net profit margin was 13.2%, an increase of 0.5 percentage points [2]. - Operating cash flow turned negative at -409 million yuan, down from 890 million yuan in the same period last year, primarily due to a net decrease of 1.938 billion yuan in customer and interbank deposits [2]. Segment Analysis - In 1H25, revenue from the railway sector was 8.324 billion yuan, down 7.87% year-on-year, affected by differences in project construction progress, with a gross margin of 31.32%, up 1.28 percentage points [3]. - The urban rail sector generated 3.916 billion yuan, a year-on-year increase of 12.85%, with a gross margin of 31.95%, down 1.01 percentage points [3]. - The overseas sector saw revenue of 944 million yuan, a significant increase of 55.92%, attributed to ongoing projects like the Guinea-Massi railway, with a gross margin of 21.24%, down 12.36 percentage points [3]. - New contracts signed in 1H25 totaled 17.568 billion yuan, a decrease of 16.44% year-on-year, with the railway sector contributing 11.14 billion yuan, up 12.64%, and the urban rail sector 3.774 billion yuan, up 26.51% [3]. Profit Forecast and Valuation - Due to the contraction in engineering business, the company has lowered its net profit forecasts for 2025 and 2026 by 7.9% and 11.4% to 3.519 billion yuan and 3.639 billion yuan, respectively [4]. - The current A-share price corresponds to a price-to-earnings ratio of 16.9 times for 2025 and 16.4 times for 2026, while the H-share price corresponds to 9.7 times and 9.2 times for the same years [4]. - The A-share target price is set at 6.60 yuan, indicating a potential upside of 17.2% from the current price, while the H-share target price is 3.60 HKD, with a 3% upside potential [4].

Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Views - The company focuses on the dual tracks of rail transit and low-altitude economy, consolidating and expanding its advantages in the full industry chain of rail transit communication signal engineering design, train control system equipment, and engineering technical services. It is also cultivating the low-altitude airspace management, drone manufacturing, and service operation industries, accelerating the construction of a "three industries and one state" industrial pattern in the low-altitude economy. The rail transit business is experiencing upward momentum, and the low-altitude sector is expected to become a second growth curve [2][6]. Financial Performance - In the first half of 2025, the company achieved total revenue of 14.73 billion yuan, a year-on-year increase of 2.77%. The net profit attributable to the parent company was 1.62 billion yuan, up 1.34% year-on-year. In Q2 2025, revenue reached 8 billion yuan, representing a year-on-year increase of 3% and a quarter-on-quarter increase of 19%. The net profit for Q2 was 1.06 billion yuan, a year-on-year increase of 6% and a quarter-on-quarter increase of 89% [6][9]. Revenue Breakdown - The revenue breakdown for the first half of 2025 shows that the railway sector generated 8.32 billion yuan, down 7.87% year-on-year, primarily due to differences in project construction progress. The urban rail sector generated 3.92 billion yuan, up 12.85% year-on-year, supported by a substantial backlog of orders and new contract signings. The overseas sector generated 944 million yuan, up 55.92% year-on-year, due to ongoing progress in overseas projects such as the Guinea Masisi Railway. The engineering general contracting and other sectors generated 1.48 billion yuan, up 29.93% year-on-year, due to increased performance progress of previously contracted projects [6][11]. Order Status - As of the end of Q2 2025, the company had a backlog of orders amounting to 117.56 billion yuan, with sufficient orders to support future deliveries. The company’s inventory was 3.83 billion yuan, showing a slight year-on-year increase, while contract assets were 33 billion yuan, with a slight increase quarter-on-quarter. Contract liabilities exceeded 10 billion yuan [11][12]. Growth Opportunities - The company is actively developing the domestic low-altitude economy market, having completed the deployment of 15 platforms in cities such as Qingdao and Xiong'an. Collaborations with various partners are underway to enhance low-altitude communication solutions and applications in emergency rescue and logistics operations [11][12]. Future Profitability - The company is expected to achieve net profits attributable to the parent company of 3.91 billion yuan and 4.46 billion yuan in 2025 and 2026, respectively, corresponding to price-to-earnings ratios of 14.9 and 13.0 times [11][12].

Core Insights - The rail transit equipment sector saw a rise of 0.68% on August 28, with China Communication Technology leading the gains [1] - The Shanghai Composite Index closed at 3843.6, up 1.14%, while the Shenzhen Component Index closed at 12571.37, up 2.25% [1] Sector Performance - China Communication Technology (688009) closed at 5.63, up 2.55%, with a trading volume of 748,300 shares and a transaction value of 416 million yuan [1] - Other notable performers included: - Quanta Technology (301048) at 12.67, up 1.77% [1] - Yonggui Electric (300351) at 18.41, up 1.49% [1] - Times New Materials (600458) at 14.49, up 1.33% [1] - The overall trading volume and transaction values for the sector were significant, indicating active market participation [1] Capital Flow - The rail transit equipment sector experienced a net outflow of 346 million yuan from institutional investors, while retail investors saw a net inflow of 222 million yuan [2] - The sector's capital flow indicates a mixed sentiment among different investor types, with institutional investors pulling back while retail investors increased their positions [2][3]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不對因本公告全部或任何部分內容而產生或因倚賴該等內容而引致的 任 何 損 失 承 擔 任 何 責 任。 中 國 鐵 路 通 信 信 號 股 份 有 限 公 司 China Railway Signal & Communication Corporation Limited* （在中華人民共和國註冊成立的股份有限公司） （股份代號：3969） (1)建議變更H股募集資金用途 (2) 建議延期及變更A股部分募投項目 中 國 鐵 路 通 信 信 號 股 份 有 限 公 司（「本公司」）董 事 會（「董事會」）謹 此 宣 佈， 董事會於2025年8月27日 舉 行 的 董 事 會 會 議 上 審 議 並 通 過（其 中 包 括）關 於建議變更H股募集資金用途和建議延期及變更A股部分募投項目的議案。 建議變更H股募集資金用途 除上述資金使用外，截至本公告日期，本公司H股募集資金剩餘人民幣5.68 億 元 尚 未 使 用，招 股 書 披 露 資 金 ...

Core Viewpoint - The company reported a stable financial performance in the first half of 2025, with a total operating income of 14.665 billion yuan, reflecting a year-on-year increase of 2.91% [3][4]. Financial Data - The company achieved operating income of 14.665 billion yuan, with the railway sector contributing 8.324 billion yuan (down 7.87%), urban rail sector 3.916 billion yuan (up 12.85%), overseas sector 0.944 billion yuan (up 55.92%), and engineering contracting and other sectors 1.480 billion yuan (up 29.93%) [3][4]. - The total new contracts signed amounted to 17.568 billion yuan, a decrease of 16.44% year-on-year, with the railway sector at 11.14 billion yuan (up 12.64%), urban rail at 3.774 billion yuan (up 26.51%), overseas at 1.875 billion yuan (down 47.16%), and engineering contracting and other sectors at 0.748 billion yuan (down 83.74%) [4]. Strategic Developments - The company is actively entering the low-altitude economy sector, aiming to establish a comprehensive industry structure involving low-altitude airspace control, drone manufacturing, and service operations [5]. - The company plans to adjust the timeline for certain projects, with the advanced and intelligent technology R&D project now expected to be operational by December 2026, and the information technology construction project by June 2026 [7][48]. Fund Management - The company raised a total of 10.53 billion yuan from its initial public offering, with net proceeds of approximately 10.354 billion yuan, all of which have been deposited into designated accounts [42]. - As of June 30, 2025, the company has utilized 5.8634 billion yuan of the raised funds, with specific allocations to various projects [43][44]. Project Adjustments - The company has decided to terminate the advanced and intelligent manufacturing base project and reallocate the remaining funds (approximately 247.465 million yuan) to new projects focused on digital and intelligent upgrades in the rail transit sector [17][20]. - The new projects include the digital and intelligent transformation of the rail control system base and the upgrade of cable production lines to enhance efficiency and sustainability [20][26].

Market Overview - The Shanghai Composite Index is at 3812.43 points, above the annual line, with a change of 0.32% [1] - The total trading volume of A-shares is 1,230.98 billion yuan [1] Stocks Breaking Annual Line - 23 A-shares have broken above the annual line today, with notable stocks including Chuangyi Information, Zhongfu Information, and Qifeng New Materials, showing divergence rates of 11.29%, 5.02%, and 3.05% respectively [1] - Stocks with smaller divergence rates that have just crossed the annual line include Guizhou Tire, Andisoo, and Haier Smart Home [1] Top Stocks by Divergence Rate - Chuangyi Information (300366) has a daily increase of 13.27% and a divergence rate of 11.29% [1] - Zhongfu Information (300659) has a daily increase of 6.91% and a divergence rate of 5.02% [1] - Qifeng New Materials (002521) has a daily increase of 3.24% and a divergence rate of 3.05% [1] Additional Stocks with Minor Divergence - Anuoqi (300067) shows a daily increase of 2.60% with a divergence rate of 1.87% [1] - Henglin Shares (603661) has a daily increase of 2.56% and a divergence rate of 1.35% [1] - Other stocks with minor divergence rates include Rabbit Baby (002043), Landun Optoelectronics (300862), and Transsion Holdings (688036) [1]

Investment Rating - The report maintains a "Buy" rating for the company [7][5]. Core Views - The company reported a total revenue of 14.73 billion yuan for H1 2025, a year-on-year increase of 2.77%, with a net profit of 1.62 billion yuan, reflecting a year-on-year growth of 1.34% [1]. - The recovery in urban rail and significant growth in overseas revenue are expected to drive future performance, alongside the demand for upgrades and renovations in the rail transit sector [1][3]. - The company is positioned to benefit from the ongoing upgrades in high-speed rail communication systems and the opening of new growth avenues in overseas markets [5]. Summary by Sections Financial Performance - For H1 2025, the gross margin was 28.76%, a decrease of 0.6 percentage points year-on-year, while the net profit margin was 12.70%, down 0.35 percentage points year-on-year [2]. - In Q2 2025, the company achieved a gross margin of 30.06%, a year-on-year decrease of 0.93 percentage points but an increase of 2.83 percentage points quarter-on-quarter [2]. Business Segments - The company’s revenue from the urban rail sector reached 3.92 billion yuan in H1 2025, a year-on-year increase of 12.85%, while overseas revenue surged by 55.92% to 944 million yuan [3]. - The total new contracts signed in H1 2025 amounted to 17.57 billion yuan, a decrease of 16.44% year-on-year, primarily due to a strategic reduction in low-margin engineering contracts [3]. Market Position - The company continues to lead in the high-speed rail and urban rail signal system integration markets, with significant contracts awarded for key projects [4]. - The company secured contracts worth 1.48 billion yuan for high-speed rail renovation projects, marking a year-on-year increase of 74.86% [4]. Profit Forecast and Valuation - The forecast for net profit for 2025-2027 is adjusted to 3.70 billion, 3.93 billion, and 4.24 billion yuan respectively, with corresponding EPS estimates of 0.35, 0.37, and 0.40 yuan [5]. - The target price for the company's A/H shares is set at 7.00 yuan and 4.02 HKD, reflecting a valuation of 20x and 10.5x PE respectively for 2025 [5].

Group 1: Company Performance - XINWANDA reported a revenue of 26.985 billion yuan, a year-on-year increase of 12.82%, and a net profit of 856 million yuan, up 3.88% [1] - GUANGXUN TECHNOLOGY achieved a revenue of 5.243 billion yuan, a year-on-year increase of 68.59%, and a net profit of 372 million yuan, up 78.98% [1] - NORTHEAST SECURITIES posted a revenue of 2.046 billion yuan, a year-on-year increase of 31.66%, and a net profit of 431 million yuan, up 225.90% [1][2] - SHANXI COAL reported a revenue of 18.053 billion yuan, a year-on-year decrease of 16.30%, and a net profit of 1.014 billion yuan, down 48.44% [3] - SHENGTIAN NETWORK achieved a revenue of 633 million yuan, a year-on-year increase of 17.23%, and a net profit of 52.304 million yuan, up 1186.02% [4] - SANLIAN FORGING reported a revenue of 775 million yuan, a year-on-year increase of 6.86%, and a net profit of 71.335 million yuan, up 3.88% [5][6] - JIAMEI PACKAGING posted a revenue of 1.257 billion yuan, a year-on-year decrease of 8.73%, and a net profit of 19.7416 million yuan, down 65.59% [8] - ANZHENG FASHION achieved a revenue of 1.146 billion yuan, a year-on-year increase of 12.38%, and a net profit of 22.0834 million yuan, turning from a loss of 12.1096 million yuan in the previous year [9] - HUAHENG BIO reported a revenue of 1.489 billion yuan, a year-on-year increase of 46.54%, and a net profit of 115 million yuan, down 23.26% [10] - BAIREN MEDICAL achieved a revenue of 248 million yuan, a year-on-year increase of 30.07%, and a net profit of 71.4006 million yuan, up 102.90% [12] - TIANZHIHANG reported a revenue of 125 million yuan, a year-on-year increase of 114.89%, but a net loss of 57.5482 million yuan, worsening by 23.80% [14] - AIBO MEDICAL achieved a revenue of 787 million yuan, a year-on-year increase of 14.72%, and a net profit of 213 million yuan, up 2.53% [15] - ZHONGSHAN SHIPPING reported a revenue of 12.585 billion yuan, a year-on-year decrease of 4.91%, and a net profit of 2.125 billion yuan, down 14.91% [16] - SHANGHAI XINYANG achieved a revenue of 897 million yuan, a year-on-year increase of 35.67%, and a net profit of 133 million yuan, up 126.31% [17] - SHANCOAL INTERNATIONAL reported a revenue of 9.66 billion yuan, a year-on-year decrease of 31.28%, and a net profit of 655 million yuan, down 49.25% [18] - GUIDANCE reported a revenue of 935 million yuan, a year-on-year increase of 71.55%, and a net profit of 143 million yuan, turning from a loss of 48.9539 million yuan in the previous year [19] - YINGFANGWEI reported a revenue of 1.927 billion yuan, a year-on-year increase of 4.48%, but a net loss of 32.2966 million yuan, worsening from a loss of 22.4024 million yuan in the previous year [21] - CHINA COMMUNICATIONS reported a revenue of 14.665 billion yuan, a year-on-year increase of 2.91%, and a net profit of 1.621 billion yuan, up 1.34% [22] - CHINA GENERAL NUCLEAR reported a revenue of 39.167 billion yuan, a year-on-year decrease of 0.53%, and a net profit of 5.951 billion yuan, down 16.30% [23] - CHINA HEAVY TRUCK reported a revenue of 26.162 billion yuan, a year-on-year increase of 7.22%, and a net profit of 669 million yuan, up 8.10% [24] - SHENGGUANG GROUP achieved a revenue of 9.275 billion yuan, a year-on-year increase of 22.78%, and a net profit of 60.8446 million yuan, up 3.06% [25] Group 2: Dividend Proposals - XINWANDA proposed a cash dividend of 0.6 yuan per 10 shares [1] - SHANXI COAL proposed a cash dividend of 0.36 yuan per 10 shares [3] - ZHONGSHAN SHIPPING proposed a cash dividend of 0.7 yuan per 10 shares [16] - CHINA HEAVY TRUCK proposed a cash dividend of 3.15 yuan per 10 shares [24]

- The report discusses the performance of various stock indices, including the Shanghai Composite Index, Shenzhen Component Index, and the ChiNext Index, which experienced significant declines[1] - The report highlights the performance of the Hang Seng Index, Hang Seng Tech Index, and Hang Seng China Enterprises Index, which also saw notable drops[1] - The report mentions the performance of the US stock market, with the Dow Jones, S&P 500, and Nasdaq indices showing slight gains[1] - The report discusses the impact of Nvidia's revenue outlook on the market, raising concerns about a potential slowdown in AI spending[1][8][12] - The report highlights the increase in France's bond risk premium and the political situation in France, with the Prime Minister planning to meet with opposition parties to avoid losing a confidence vote[1][8][12] - The report mentions Mexico's plan to increase tariffs on Chinese imports in its 2026 budget proposal to protect domestic industries[8][12] - The report discusses the rise in the 1-month Hibor rate in Hong Kong, which could pose risks to the economy[12] - The report highlights the EU's consideration of secondary sanctions to prevent third countries from helping Russia evade existing sanctions[12] - The report mentions ByteDance's valuation exceeding $330 billion following a new round of employee stock buybacks[12] - The report discusses the plans of Chinese chip manufacturers to increase AI chip production, with SMIC planning to double its 7nm chip production capacity next year[12]