SUPCON Technology (SH:688777) Changjiang Securities·2025-09-12 15:20Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The company reported a revenue of 3.83 billion yuan in the first half of 2025, a year-on-year decrease of 9.92%. The net profit attributable to the parent company was 354 million yuan, down 31.46% year-on-year. The adjusted net profit was 289 million yuan, a decline of 38.86% year-on-year. In Q2 alone, revenue was 2.22 billion yuan, down 11.56% year-on-year, with a net profit of 234 million yuan, down 36.96% year-on-year [2][6] - Despite pressure on traditional business, the company's "ALL IN AI" strategy is gradually gaining traction, with industrial AI product revenue reaching 117 million yuan and robot product revenue at 110 million yuan in the first half of 2025. The long-term outlook for the company's strategic transformation remains positive [2][6] Summary by Sections Revenue Performance - The overall revenue growth remains under pressure, with a decline of 10% in H1 2025 and 12% in Q2 2025. This is attributed to significant pressure on downstream demand and a negative PPI environment. The company is adjusting its business model, with expectations for demand growth from new projects in Xinjiang's coal chemical industry [12] - Revenue breakdown shows that industrial automation and intelligent manufacturing solutions generated 2.24 billion yuan, while automation instruments and industrial software saw declines of 9.49% and 19.49% respectively. However, the S2B platform revenue dropped significantly by 52.80% [12] Profitability Analysis - The company's gross margin was approximately 32.1% in H1 2025, a decrease of 1.15 percentage points year-on-year. The decline is mainly due to business restructuring. The gross margins for various products varied, with industrial software benefiting from AI promotion [12] - A significant factor in profit decline was asset impairment and credit impairment losses totaling 112 million yuan, which impacted overall profitability [12] Business Development - The AI and robotics sectors are progressing well, with the TPT model entering a phase of scale application, generating 117 million yuan in revenue. The company has successfully implemented over 110 projects across various industries [12] - The subscription model for industrial software has seen 938 clients signed up by H1 2025, indicating a shift towards new business models [12] Investment Recommendations - The company is expected to achieve net profits of 1.16 billion yuan, 1.38 billion yuan, and 1.65 billion yuan for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 33.7x, 28.2x, and 23.6x. Investors are advised to pay close attention to the company's developments [12]