Core Viewpoint - The company reported better-than-expected performance in 1H25, with a revenue of 699 million yuan, a year-on-year increase of 22.3%, and a significant narrowing of adjusted net loss to 7 million yuan, down 82.1% year-on-year, indicating effective cost control and a strong recovery in performance [1][2]. Revenue and Growth - The company experienced a strong revenue rebound, focusing on the manufacturing sector, with a strategic shift from defense to offense expected in 2025, aiming for renewed revenue growth [1]. - In 1H25, revenue from the manufacturing sector increased by 27.0% to 556 million yuan, accounting for 79.5% of total revenue, up 3.0 percentage points year-on-year [1]. - Revenue from sub-sectors such as energy and power, automotive equipment, food and beverage, and 3C high-tech grew by 48.5%, 12.1%, 14.8%, and 34.6% respectively, while the steel and metallurgy sector saw a decline of 9.8% to 45 million yuan [1]. Profitability and Cash Flow - The company's gross margin improved to 35.0%, up 1.2 percentage points year-on-year, with a consistent annual increase since 2020 [2]. - R&D expenses rose by 11.2% to 165 million yuan due to business expansion, while accounts receivable days decreased by 52 days to 122 days, significantly enhancing cash collection efficiency [2]. - The company reported a positive cash flow from operating activities of 8.4 million yuan, recovering from a negative cash flow of 26 million yuan in 1H24 [2]. Strategic Developments - The company is solidifying its position in industrial AI software and robotics, launching the AEAM industrial equipment management software and collaborating with KUKA Robotics to promote new industrialization [3]. - The company also partnered with Qianlong Intelligent to develop embodied intelligent robots, securing two invention patents in August [3]. - A share buyback announcement of 100 million yuan was made in May 2025, reflecting confidence in future growth [3]. Earnings Forecast and Valuation - The company's earnings are on a steady recovery path, with revenue forecasts for 2025 and 2026 raised by 12.2% and 19.6% to 1.47 billion yuan and 1.73 billion yuan respectively [3]. - Adjusted net profit estimates for 2025 and 2026 were revised from -9 million yuan and 60 million yuan to -8 million yuan and 70 million yuan [3]. - The target price was increased by 88.9% to 8.5 HKD, indicating a potential upside of 25.7% from the current stock price [3].