POWER HF(SH:605100) Mei Ri Jing Ji Xin Wen·2025-08-27 15:37Core Viewpoint - Huafeng Co., Ltd. reported a significant decline in revenue and net profit for the first half of 2025, reflecting the challenges faced by the traditional diesel engine industry amid the rise of new energy vehicles [1][4]. Financial Performance - The company's revenue for the first half of 2025 was 373 million yuan, a decrease of 33.10% compared to the same period last year [2]. - The net profit attributable to shareholders was 13.15 million yuan, down 71.94% year-on-year [2][4]. - The net profit after deducting non-recurring items was 11.55 million yuan, a decline of 74.66% compared to the previous year [2]. - The operating cash flow was negative at -14.11 million yuan, a drop of 108.07% from the previous year [2]. - Basic earnings per share decreased by 71.43% to 0.08 yuan [3]. Industry Context - The diesel engine industry is facing structural challenges due to the rapid growth of the new energy vehicle market, with traditional fuel heavy-duty truck sales under pressure [5]. - In the first half of 2025, the sales of commercial heavy-duty trucks in China reached 539,000 units, a year-on-year increase of 6.9%, but the market is experiencing a divergence between traditional and new energy vehicles [5]. - The new energy heavy-duty truck sales surged approximately 186% year-on-year, reaching a historical high, while Huafeng has not yet ventured into the new energy components market [5]. Operational Challenges - Huafeng's core component business is impacted by structural demand changes and setbacks in overseas operations [4]. - The company is undergoing a production line technology upgrade, which has led to reduced revenue from natural gas heavy-duty truck components [6]. - The Indian subsidiary's operations were hindered by strategic adjustments from key clients and changes in visa policies, resulting in decreased revenue and profits [7]. Strategic Initiatives - Despite challenges in the Indian market, Huafeng has seen growth in overseas orders for generator sets used in communication base stations, with deliveries to countries like the Philippines and Nigeria [10]. - The company is actively seeking transformation by focusing on the data center backup power market, which is seen as a potential new growth area [11]. - A strategic cooperation agreement was signed with Shanghai Jipian AI Technology Co., Ltd. to supply power equipment for a new computing center, marking a significant step in Huafeng's efforts to integrate energy and computing capabilities [11].