Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company's net profit attributable to shareholders is expected to grow by 8% to 10% year-on-year in Q2, indicating stable operational performance [2] - Recent government policies in the measurement and testing sector are expected to provide significant growth opportunities for the company [3] - The company is well-positioned for long-term growth due to its diversified strategy, proactive international expansion, and strong market position [4] Financial Forecasts and Valuation - Total revenue is projected to reach RMB 6,535 million in 2025, with a year-on-year growth rate of 7.42% [1] - The net profit attributable to shareholders is forecasted to be RMB 1,055.55 million in 2025, reflecting a year-on-year increase of 14.60% [1] - The latest diluted EPS is expected to be RMB 0.63 in 2025, with a P/E ratio of 19.50 [1]

Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 17.23 CNY, compared to the current price of 12.06 CNY [5][9]. Core Insights - The company is expected to achieve a net profit attributable to shareholders of 463-471 million CNY in the first half of 2025, representing a year-on-year increase of 6.06-7.80%. The non-recurring net profit is projected to be 436-443 million CNY, reflecting a growth of 8.13%-10.01% year-on-year [2][5]. - The company continues to demonstrate operational resilience in Q2 2025, with a net profit of 327-334 million CNY, showing a year-on-year increase of 7.5-10% and an acceleration compared to Q1 [9]. - The international expansion strategy is opening up growth opportunities, with ongoing acquisitions, including a deal with Carlyle Group to acquire Safety SA in South Africa, expected to enhance service capabilities in Africa [9]. Financial Summary - Total revenue is projected to grow from 6,084 million CNY in 2024 to 8,158 million CNY in 2027, with year-on-year growth rates of 10.3% for 2025 and 10.2% for 2026 [4][10]. - Net profit attributable to shareholders is forecasted to increase from 921 million CNY in 2024 to 1,274 million CNY in 2027, with growth rates of 12.5% for 2025 and 10.9% for 2026 [4][10]. - The company’s earnings per share (EPS) is expected to rise from 0.55 CNY in 2024 to 0.76 CNY in 2027, with a corresponding decrease in price-to-earnings (P/E) ratio from 22x in 2024 to 16x in 2027 [4][10].

Market Overview - The Shanghai Composite Index closed at 3546.50 points, above the annual line, with a gain of 1.05% [1] - The total trading volume of A-shares reached 10310.63 billion yuan [1] Stocks Breaking Annual Line - A total of 55 A-shares have broken above the annual line today, with notable stocks including XWANDA, Fuxing Co., and Guolian Minsheng, showing divergence rates of 5.64%, 3.70%, and 3.15% respectively [1] - Stocks with smaller divergence rates that just crossed the annual line include Wangfujing, Tonghe Pharmaceutical, and Sanxia Water Conservancy [1] Top Stocks by Divergence Rate - The top three stocks with the highest divergence rates are: - XWANDA (9.13% increase, 5.12% turnover rate, latest price 21.16 yuan, divergence rate 5.64%) [1] - Fuxing Co. (4.31% increase, 5.52% turnover rate, latest price 2.42 yuan, divergence rate 3.70%) [1] - Guolian Minsheng (6.66% increase, 3.68% turnover rate, latest price 11.21 yuan, divergence rate 3.15%) [1] Additional Stocks with Notable Performance - Other stocks with significant performance include: - Tuoer Si (3.05% increase, 3.72% turnover rate, latest price 18.56 yuan, divergence rate 2.82%) [1] - ST Huaming (4.83% increase, 10.28% turnover rate, latest price 10.21 yuan, divergence rate 2.73%) [1] - Green Beauty (3.01% increase, 2.26% turnover rate, latest price 6.50 yuan, divergence rate 2.32%) [1]

Core Viewpoint - The company, Huace Testing Certification Group Co., Ltd., has projected a growth in net profit for the second quarter and the first half of 2025, indicating a positive performance trend compared to the previous year [1][2]. Performance Forecast - For the second quarter of 2025, the expected net profit attributable to shareholders is between 326.86 million yuan and 334.46 million yuan, representing a year-on-year growth of 7.5% to 10% [1]. - For the first half of 2025, the expected net profit attributable to shareholders is between 463.05 million yuan and 470.65 million yuan, with a year-on-year growth of 6.06% to 7.80% [1]. - The net profit after deducting non-recurring gains and losses for the second quarter is projected to be between 310.54 million yuan and 318.14 million yuan, with a growth of 7.01% to 9.63% compared to the previous year [1]. Reasons for Performance Changes - The company attributes the expected growth in net profit to a focus on strategic goals and the implementation of the "123 strategy," which emphasizes customer orientation and quality service [1]. - The company has been actively exploring AI, digitalization, and automation to enhance operational efficiency, alongside a talent development plan to improve organizational capabilities [1]. - Strategic mergers and international expansion are also expected to contribute to long-term growth [1]. Non-Recurring Gains and Losses - The estimated impact of non-recurring gains and losses on the company's semi-annual net profit is approximately 27.5 million yuan, compared to 33.78 million yuan in the same period last year [2]. Audit Status - The performance forecast is based on preliminary calculations by the company's finance department and has not been audited by an external auditor [3].

Current Period Performance Forecast [Q2 2025 Performance Forecast](index=1&type=section&id=Q2%202025%20Performance%20Forecast) Net profit attributable to shareholders for Q2 2025 is projected to increase by 7.5% to 10%, with non-recurring adjusted net profit rising by 7.01% to 9.63% 2025 Q2 Performance Forecast | Item | Q2 2025 (Estimated) | Q2 2024 (Actual) | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Shareholders | RMB 326.86 million – RMB 334.46 million | RMB 304.0531 million | 7.5% – 10% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Gains/Losses) | RMB 310.54 million – RMB 318.14 million | RMB 290.1993 million | 7.01% – 9.63% | [H1 2025 Performance Forecast](index=1&type=section&id=H1%202025%20Performance%20Forecast) Net profit attributable to shareholders for H1 2025 is projected to increase by 6.06% to 7.80%, with non-recurring adjusted net profit rising by 8.13% to 10.01% 2025 H1 Performance Forecast | Item | H1 2025 (Estimated) | H1 2024 (Actual) | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Shareholders | RMB 463.05 million – RMB 470.65 million | RMB 436.5947 million | 6.06% – 7.80% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Gains/Losses) | RMB 435.54 million – RMB 443.14 million | RMB 402.8105 million | 8.13% – 10.01% | - The performance forecast period is from January 1, 2025, to June 30, 2025, with performance expected to increase year-on-year[3](index=3&type=chunk) Pre-audit Status of Performance Forecast [Pre-audit Status of Performance Forecast](index=1&type=section&id=Pre-audit%20Status%20of%20Performance%20Forecast) This performance forecast is based on preliminary calculations by the company's finance department and has not been audited - This performance forecast has not been audited by a certified public accountant[4](index=4&type=chunk) Explanation of Performance Changes [Operating Strategy and Efficiency Improvement](index=2&type=section&id=Operating%20Strategy%20and%20Efficiency%20Improvement) Strategic focus, customer orientation, lean management, and AI/digitalization initiatives drove steady performance growth and enhanced organizational capabilities - The company's management maintained strategic focus, concentrating on strategic goals and directions, and solidifying its operational foundation[5](index=5&type=chunk) - Through deepening customer orientation, comprehensively advancing the "123 Strategy" implementation, upgrading quality services, and fostering innovative development[5](index=5&type=chunk) - Deeply promoting lean management practices and actively exploring AI, digitalization, and automation to further enhance operational efficiency[5](index=5&type=chunk) - Systematically implementing the "Talent Refinement Plan" to continuously improve organizational capabilities and innovation vitality, driving steady net profit growth through multiple quality and efficiency enhancement measures[5](index=5&type=chunk) - Gradually advancing strategic mergers and acquisitions and international expansion, which are expected to inject long-term growth momentum for future development[5](index=5&type=chunk) - In the second quarter, the company achieved sustained operating performance growth, overcoming the high base pressure from the prior year[5](index=5&type=chunk) [Impact of Non-recurring Gains and Losses](index=2&type=section&id=Impact%20of%20Non-recurring%20Gains%20and%20Losses) Non-recurring gains and losses are estimated to impact half-year net profit by approximately **RMB 27.5 million**, a decrease from the prior year Comparison of Non-recurring Gains and Losses Impact | Indicator | H1 2025 (Estimated) | H1 2024 (Actual) | | :--- | :--- | :--- | | Impact of Non-recurring Gains and Losses | Approximately RMB 27.5 million | RMB 33.7842 million | Other Related Explanations [Other Related Explanations](index=2&type=section&id=Other%20Related%20Explanations) This performance forecast is a preliminary estimate by the finance department and awaits detailed disclosure in the H1 2025 report - This performance forecast is a preliminary calculation by the company's finance department and has not been audited by an accounting firm[6](index=6&type=chunk) - Specific financial data for the 2025 half-year performance will be detailed in the company's 2025 Half-Yearly Report[6](index=6&type=chunk) - Investors are advised to make prudent decisions and be aware of investment risks[6](index=6&type=chunk)

华测检测（300012）公告，预计2025年1月1日至2025年6月30日归属于上市公司股东的净利润为4.63亿 元–4.71亿元，同比上年同期的4.37亿元增长6.06%–7.80%。预计2025年第二季度归属于上市公司股东的 净利润为3.27亿元–3.34亿元，同比上年同期的3.04亿元增长7.5%–10%。预计2025年上半年归属于上市 公司股东的扣除非经常性损益后的净利润为4.36亿元–4.43亿元，同比上年同期的4.03亿元增长8.13%– 10.01%。预计非经常性损益对公司半年度净利润的影响额约为2750万元，上年同期非经常性损益为 3378.42万元。 ...

Group 1 - The housing inspection concept rose by 2.89%, ranking second among concept sectors, with 37 stocks increasing in value [1][2] - Notable gainers in the housing inspection sector include Guangzi International with a 30% limit up, Chongqing Construction also hitting the limit up, and other significant increases from Zhongshi Consulting, Te Fa Service, and Xujie Technology at 13.16%, 10.06%, and 8.90% respectively [1][2] - The sector saw a net inflow of 207 million yuan from main funds, with 25 stocks receiving net inflows, and 7 stocks exceeding 10 million yuan in net inflow [2][3] Group 2 - The top net inflow stocks in the housing inspection sector include Te Fa Service with a net inflow of 84.65 million yuan, followed by Chongqing Construction, Huace Testing, and Dongfang Yuhong with net inflows of 63.18 million yuan, 38.99 million yuan, and 31.84 million yuan respectively [2][3] - The net inflow ratios for Chongqing Construction, Guojian Group, and Jianyan Institute were 22.23%, 16.32%, and 10.86% respectively, indicating strong interest from main funds [3][4] - The overall performance of the housing inspection sector reflects a positive trend, with significant capital inflows and stock price increases among key players [1][2][3]

Summary of Huace Testing Conference Call Company Overview - **Company**: Huace Testing - **Industry**: Testing and Inspection Services Key Points and Arguments Performance and Growth - From 2018 to 2021, Huace Testing achieved significant growth through expansion, resulting in a tenfold increase in stock price during this period [4] - However, the company faced capital expenditure and depreciation pressures, leading to losses at one point [2][4] - After the arrival of former SGS president, the company slowed its expansion, releasing operational leverage and entering a phase of rapid performance improvement [2][4] Challenges and Pressures - From 2022 to 2024, Huace Testing experienced a slowdown in growth from 15%-20% to around 5% [2][4] - The company faced slow overseas expansion, particularly in the consumer sector, and a decline in valuation due to foreign capital withdrawal, with PE ratios dropping from over 70 to 19-20 [4] - The medical and pharmaceutical segment saw revenue drop to less than 300 million in 2024, leading to significant losses [5] Recovery and Future Outlook - In 2025, Huace Testing is expected to see a turning point, with improvements in the medical segment and revenue growth in the chip testing business [2][5] - The company anticipates a revenue range of 1.02 to 1.05 billion in 2025, with a projected growth rate of 10%-15% for 2026 [3][11] - The food-grade segment is expected to grow by 10%-15% from a base of 1.6 to 1.7 billion, driven by breakthroughs in pet food and seed research [2][8] Internationalization Strategy - In 2025, Huace Testing is shifting towards a new round of internationalization, focusing on consumer sectors and overseas acquisitions in transportation and ESG [9] - Key markets include Europe, Southeast Asia, and South Africa, with a recent contract signed for food testing in South Africa [9][10] Industry Characteristics - The testing industry is characterized by its fragmented nature, requiring precise management and the ability to tap into larger development opportunities [10] - Huace Testing plans to leverage supply chain management and overseas laboratory layouts to enter the global supplier management directory [10] Financial Recovery - The company is making significant progress in reducing losses, with cash flow improving as receivables from soil monitoring and testing begin to recover [7][8] - The construction and building materials segment is also seeing gradual recovery, contributing to overall financial improvement [6][7] Additional Important Information - The stock price has been affected by the aforementioned challenges, but the current valuation presents a key opportunity for investors [3][12] - The company is expected to achieve at least 1.02 billion in revenue this year, with potential for exceeding this figure if other business segments perform well or if acquisitions occur [8]

Overview - The electrical testing market in China is rapidly growing, with a projected market size of 4.144 billion yuan in 2024, representing a year-on-year growth of 7.94% [1][10] - High-voltage electrical testing accounts for approximately 66.07% of the market, while low-voltage testing makes up about 33.93% [10] - The increasing consumer demand for quality, safety, and performance in electrical products is driving companies to prioritize product testing [10] - The Belt and Road Initiative is accelerating the overseas expansion of Chinese electrical companies, increasing the demand for electrical testing results in international markets [1][10] Market Policies - China has implemented stricter regulations on the quality, safety, and environmental standards of electrical products, creating a favorable policy environment for the electrical testing industry [4] - A series of policies have been introduced, including the "Action Plan for the Development of Intelligent Testing Equipment Industry (2023-2025)" and "Guidance on Promoting the Green Development of Manufacturing Industry" [4][6] Industry Chain - The upstream of the electrical testing industry includes suppliers of testing equipment, testing consumables, and software [8] - The midstream consists of demand markets covering various sectors such as power distribution, household appliances, and automotive electronics [8] Market Demand Structure - The largest demand for electrical testing comes from the power distribution sector, accounting for over 30%, followed by household appliances and machine tools at approximately 21.57% and 11.87%, respectively [8] - The total investment in China's power sector is projected to reach 1.777 trillion yuan in 2024, with a year-on-year growth of 14.63% [8] Competitive Landscape - The electrical testing market is divided into high-voltage and low-voltage testing, with the low-voltage segment being highly fragmented and dominated by numerous small enterprises [12] - High-voltage testing is characterized by higher technical requirements and fewer leading companies, with notable players including the Electric Power Research Institute and Xi'an High Voltage Electrical Research Institute [12][14][17] Representative Companies - Suzhou Electrical Science Research Institute Co., Ltd. is a leading third-party testing organization with a revenue of 619 million yuan in 2024, where high-voltage testing accounted for 76.91% of its income [14] - Xi'an High Voltage Electrical Research Institute Co., Ltd. reported a total revenue of 798 million yuan in 2024, with testing service income making up 92.47% of its total revenue [17] Development Trends - The application of technologies such as artificial intelligence, big data, and cloud computing in the electrical testing industry is expected to increase, enhancing testing efficiency and accuracy [19] - There is a growing demand for customized testing services as the market becomes more segmented, with a shift towards comprehensive services including equipment status assessment and predictive maintenance [19]

Group 1 - Foreign institutions conducted a total of 4,766 research visits to A-share companies in the first half of 2025, with over 1,000 visits to companies on the Shenzhen Main Board, ChiNext, and STAR Market [2][3] - Huichuan Technology was the most favored A-share company, receiving 485 visits from foreign institutions, followed by Mindray Medical with 299 visits [3] - Point72, a prominent hedge fund, led the research visits with 116 in the first half of 2025, focusing on 84 companies including Huichuan Technology, Xiaogoods City, and Aopute [3] Group 2 - Multiple foreign institutions hold an optimistic view on the performance of A-shares in the second half of 2025, citing strong market resilience and increased confidence in Chinese assets [3][4] - Morgan Stanley Fund believes that the current external environment does not pose substantial pressure on A-shares, viewing short-term disturbances as manageable [4] - Invesco's CIO for mainland China and Hong Kong anticipates the continuation and expansion of the "old for new" consumption policy, which is expected to drive economic growth in the coming months [4]