Core Viewpoint - Industrial Fulian's stock surged to its limit due to the launch of Apple's new iPhone models, particularly the iPhone Air, which is touted as the "thinnest iPhone ever" [2][5][6] Stock Performance - On September 10, Industrial Fulian opened at 51.60 CNY per share, reaching a high of 5.76% before hitting the limit up at 9:48 AM, and closing at 53.67 CNY with a total trading volume of 183.1 billion CNY [3][4] - The company's market capitalization increased by 969.17 billion CNY, surpassing 1 trillion CNY again [4] Partnership with Apple - Industrial Fulian has a long-standing and stable partnership with Apple, being a key player in the production of iPhones and AI servers [5][6] - The company has been expanding its workforce to meet the production demands for the iPhone 17 series, indicating a strong operational capacity [5] Research and Development Investment - Industrial Fulian has consistently invested over 10 billion CNY annually in R&D from 2020 to 2024, with specific figures of 100.38 billion CNY, 108.35 billion CNY, 115.88 billion CNY, 108.11 billion CNY, and 106.31 billion CNY [7][8] - In the first half of 2025, R&D investment reached 50.95 billion CNY, reflecting a year-on-year increase of 4.49% [8] Financial Performance - In the first half of 2025, Industrial Fulian reported a revenue of 360.76 billion CNY and a net profit of 121.13 billion CNY, marking a year-on-year growth of 35.58% and 38.61% respectively [9] - The company's AI server revenue in the cloud computing sector is steadily increasing, with overall server revenue growing over 50% and AI server revenue increasing by over 60% in the second quarter [9]

Market Overview - The PLC market in China is expected to grow from 13.7 billion yuan in 2024 to 14.6 billion yuan in 2027, indicating a clear growth potential [1] - The current domestic production rate of PLCs is approximately 32%, with a policy goal to achieve over 50% by 2027 [1] Company Performance - Zhongkong Technology, a leading company in industrial automation, is benefiting from the domestic control system equipment upgrade opportunities, with its market share in large PLCs increasing year by year [1] - Revenue from the petrochemical, chemical, and metallurgy sectors remains stable, while revenue from the energy, building materials, and paper industries is growing, with year-on-year increases of 9.32%, 82.58%, and 77.56% respectively [1] Technological Innovation - Zhongkong Technology's PLC played a crucial role in the successful installation of the world's largest 26MW offshore wind turbine, achieving full domestication and high reliability [2] - The PLC features a dual-bus redundancy and distributed architecture, with a communication reliability of 99.9999% and over 1000 hours of fault-free performance in salt spray tests [2] - The M4Pro system, launched by Zhongkong Technology, integrates multi-core CPU, AI GPU, and security chips, breaking traditional PLC functionality boundaries and transforming it into an industrial AI terminal [4] Future Strategy - The company plans to expand into wind power control systems, nuclear energy, and ship power markets, focusing on deep-sea wind power and high-precision manufacturing [3] - Zhongkong Technology aims to continue developing its technology in the PLC field over the next 3-5 years, with a focus on industrial AI and high-end application scenarios [8] - The company is actively pursuing a global strategy, establishing a presence in over 50 countries and regions, with a focus on high-end equipment manufacturing and international competitiveness [7]

Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, but new business segments like industrial AI and robotics are showing rapid growth, which is helping to offset some of the pressures from traditional business areas [1][2]. Financial Performance - In the first half of 2025, the company achieved revenue of 3.83 billion yuan, a year-on-year decrease of 9.92% - The net profit attributable to shareholders was 354 million yuan, down 31.46% year-on-year - The non-recurring net profit was 289 million yuan, a decline of 38.86% year-on-year [1] Quarterly Analysis - In Q2 2025, the company reported revenue of 2.22 billion yuan, a year-on-year decrease of 11.56% - The net profit attributable to shareholders for Q2 was 234 million yuan, down 36.96% year-on-year - The decline in revenue and profit is attributed to industry competition, reduced bank wealth management and interest income, and increased foreign exchange losses [2] Business Segments - The company maintains a strong position in traditional business areas, with a 40.4% market share in distributed control systems (DCS) and a 31.2% market share in safety instrumented systems (SIS) in 2024 - Despite some slowdown in downstream investments, structural growth was observed in sectors like energy, building materials, and papermaking, with revenue growth of 82.58% in building materials and 77.56% in papermaking [3] International Expansion - The company has made significant strides in international markets, signing a pipeline project contract with Algeria's national oil and gas company, marking its entry into the top twenty global oil companies not funded by China - As of June 2025, the company has opened 200 global 5S stores, enhancing its global marketing service system [3] Strategic Initiatives - The company is implementing the "1+2+N" strategic framework, focusing on AI-driven intelligent operations - A new industrial agent generation platform (TPT 2) was launched, utilizing a mixed expert model (MoE) to reshape industrial software architecture and application models - The company is promoting a subscription-based revenue model, having signed contracts with 938 subscription clients by June 2025 [4] Investment Outlook - The company is positioned as a leader in process industrial automation, with promising growth in industrial AI and robotics, as well as new opportunities in international markets - Revenue forecasts for 2025-2027 are adjusted to 9.32 billion, 10.58 billion, and 12.06 billion yuan, with corresponding growth rates of 2.0%, 13.5%, and 14.1% - Net profit forecasts are revised to 1.14 billion, 1.27 billion, and 1.45 billion yuan, with growth rates of 1.9%, 11.8%, and 13.8% respectively [5]

Investment Rating - The report maintains a "Strong Buy" rating for the company, expecting it to outperform the benchmark index by over 20% in the next six months [2][8]. Core Views - The company reported a revenue of 3.83 billion yuan for the first half of 2025, a year-on-year decrease of 9.92%, and a net profit attributable to shareholders of 354 million yuan, down 31.46% year-on-year. The decline in revenue and profit is attributed to industry competition, reduced bank wealth management and interest income, and increased foreign exchange losses [2][3]. - Despite short-term performance pressure, the company is focusing on industrial AI and robotics, which are becoming the core growth engines, partially offsetting the short-term pressures from traditional businesses. The industrial AI product TPT generated revenue of 117 million yuan, while the robotics segment brought in 110 million yuan, with new orders totaling 200 million yuan [3][8]. - The company maintains a leading position in traditional business, with a domestic market share of 40.4% in distributed control systems (DCS) and 31.2% in safety instrumented systems (SIS). The company has also made significant strides in overseas market expansion, including a contract with Algeria's national oil and gas company [3][8]. - The "1+2+N" strategic framework is being implemented, with industrial robots achieving large-scale deployment. The company has launched the world's first time-sequence hybrid expert model-driven industrial agent generation platform (TPT 2) and has signed 938 subscription-based clients, marking a strategic breakthrough in its business model [3][8]. - The company expects revenue growth of 2.0%, 13.5%, and 14.1% for 2025, 2026, and 2027, respectively, with net profit attributable to shareholders projected at 1.139 billion yuan, 1.274 billion yuan, and 1.450 billion yuan for the same years. The target price is set at 57.96 yuan, based on a 36x PE ratio for 2026 [3][8]. Financial Summary - For 2025, the company anticipates total revenue of 9.319 billion yuan, with a year-on-year growth rate of 2.0%. The net profit attributable to shareholders is expected to be 1.139 billion yuan, reflecting a growth rate of 1.9% [4][9]. - The company's total market capitalization is approximately 38.15 billion yuan, with a circulating market value of 37.77 billion yuan. The asset-liability ratio stands at 42.31% [5][9].

Core Viewpoint - The company reported a significant decline in revenue and profit for the first half of 2025, primarily due to changes in the North American automotive industry and increased competition in the domestic market [1][2]. Financial Performance - The company achieved a revenue of 504 million yuan in the first half of 2025, a year-on-year decrease of 51.65% [1][2]. - The total profit for the period was -49.7 million yuan, compared to a profit of 65.9 million yuan in the same period last year [1][2]. - The net profit attributable to shareholders was -35.1 million yuan, down from 69.0 million yuan year-on-year [1][2]. - The basic earnings per share were -0.08 yuan [1]. Market and Operational Challenges - The decline in revenue was attributed to delayed project recoveries and slow initiation of new projects in North America, alongside increased competition and reduced investment demand from major manufacturers in the domestic market [2]. - The company experienced a shift from profit to loss in net profit and total profit due to the decrease in revenue, which led to increased fixed cost allocation and a decline in gross margin [2]. Strategic Focus and Innovations - The company is focusing on robotics automation and smart manufacturing, actively monitoring market demands and technological trends [2]. - Collaborations with international AI companies and local universities are ongoing to enhance technology development in areas such as visual defect detection and AI-integrated manufacturing execution systems [2]. Market Expansion Efforts - The company is expanding its global market presence while deepening its focus on the automotive manufacturing automation sector [3]. - New market segments being targeted include warehousing logistics, prefabricated construction, aerospace manufacturing, engineering machinery, and consumer goods [3]. - The company reported a 43.06% year-on-year increase in new overseas orders during the first half of 2025 [3]. - The company is adjusting its market development strategies in response to policy trends and maintaining close communication with core customers to seize market opportunities [3].

Core Insights - Zhongkong Technology launched TPT 2, a time-series pre-trained transformer model aimed at addressing energy optimization, fault accidents, and product quality fluctuations in the process industry [2][3] - TPT 2 builds on the success of TPT 1, which has been validated in over 110 cases, and is designed to enhance the competitiveness of enterprises in the current economic environment [2][3] - The model is tailored for the specific needs of the oil and chemical industries, providing integrated support from solutions to industrial intelligence [3] Group 1 - TPT 2 focuses on precise perception and dynamic optimization of production processes, contributing quantifiable cost reduction and efficiency improvements in sectors like petrochemicals and chemicals [2][3] - The model has been successfully applied in over a hundred installations across major companies such as China National Petroleum Corporation and China Petrochemical Corporation, demonstrating significant results [3] - TPT 2 achieved an anomaly prediction accuracy of 99.79% and improved ethylene yield by 0.373% at a specific facility [3] Group 2 - The launch event attracted nearly 700 representatives from leading companies, industry organizations, and research investment institutions worldwide [3] - As of the launch date, there were 518 pre-order companies and 112 sets sold, with 3,268 online registered applicants [3] - Industry experts suggest that TPT 2 could lead to the establishment of fully automated factories in the future [4]

Group 1 - The core focus of the conference was on the demonstration of TPT 2 technology by Zhongkong Technology, addressing common pain points in the petrochemical industry [1] - TPT 2 allows users to interactively adjust operational parameters, such as the atmospheric distillation tower's end-point, providing detailed guidance and optimal operational paths for the next half hour [1] - Users can save the results as an Agent for future reference, enabling quick execution of similar tasks without the need for repeated planning [1] Group 2 - Zhongkong Technology showcased how TPT 2 can optimize ethylene production by transforming business problems into actionable solutions and facilitating rapid engineering application deployment [2] - TPT 2 integrates with multiple products from Zhongkong Technology, creating synergistic effects that enhance overall performance [2] - The technology can analyze vast amounts of real-time industrial data, significantly improving safety measures by predicting risks based on historical data [2]

Core Viewpoint - The company achieved steady growth in performance, benefiting from the rapid growth of the 3C and lithium battery businesses, with H1 2025 revenue of 683 million yuan and net profit of 146 million yuan, representing year-on-year increases of 30.68% and 28.8% respectively [2][3] Financial Performance - In H1 2025, the company reported revenue of 683 million yuan and net profit of 146 million yuan, with a year-on-year growth of 30.68% and 28.8% respectively. The net profit after deducting non-recurring items was 132 million yuan, up 36.26% year-on-year [1][2] - For Q2 2025, the company achieved revenue of 415 million yuan and net profit of 88 million yuan, with year-on-year growth of 40.34% and 57.24% respectively [2] - The company's gross margin and net margin for H1 2025 were 65.47% and 21.75%, with changes of -0.54 and +0.05 percentage points respectively [2] Business Segments - In H1 2025, the company generated 439 million yuan from the 3C industry, a year-on-year increase of 23.82%, driven by the large-scale application of industrial AI technology in consumer electronics manufacturing [3] - Revenue from the lithium battery industry reached 167 million yuan, up 49.35% year-on-year, benefiting from the recovery of the lithium battery sector and collaborations with leading battery clients [3] - The semiconductor and automotive sectors generated revenues of 31.31 million yuan and 13.70 million yuan, with year-on-year growth of 25.51% and 65.67% respectively, indicating steady growth [3] Strategic Development - The company has established a product matrix integrating "vision + sensing + motion + AI" and is strategically positioning itself in the smart robotics sector. In H1 2025, the company set up a robotics division focusing on key visual components required for robotic "visual perception" [3] - The collaboration between "vision + AI + robotics" is expected to enhance the company's business towards higher value areas [3]

Investment Rating - The report maintains a "Buy" rating for the company [1][10]. Core Insights - The company achieved double growth in both year-on-year and quarter-on-quarter performance for Q2 2025, with revenue reaching 205.09 billion yuan, a year-on-year increase of 26.73%, and a net profit of 29.68 billion yuan, up 40.15% year-on-year [6]. - The company benefits from a recovering downstream demand and has a clear advantage in multi-platform and customized solutions, with its general automation business revenue growing by 17.11% year-on-year [6][7]. - The renewable energy business continues to grow rapidly, with revenue of approximately 90.00 billion yuan in H1 2025, reflecting a year-on-year increase of about 50.00% [6]. - Strategic business initiatives are progressing quickly, with significant advancements in industrial AI technology and international market growth, particularly in regions like Vietnam and the Middle East [7]. Summary by Sections Financial Performance - In H1 2025, the company reported a revenue of 205.09 billion yuan and a net profit of 29.68 billion yuan, with a gross margin of 30.23% and a net margin of 14.65% [6]. - Q2 2025 revenue was 115.31 billion yuan, showing a year-on-year growth of 18.99% and a quarter-on-quarter growth of 28.44% [6]. Business Segments - The general automation business saw revenue of 88.07 billion yuan in H1 2025, with notable growth in various segments: frequency converters (8.00%), general servo systems (23.33%), and PLC&HMI (30.43%) [6]. - The renewable energy segment's revenue growth is attributed to increased orders from domestic and international clients, with over 30 domestic projects and 5 international projects in progress [6][7]. Strategic Developments - The company has made significant progress in integrating industrial AI technology, launching the iFG platform, and expanding its product offerings in humanoid robotics [7]. - International revenue grew by 39.34% year-on-year, indicating successful penetration into new markets [7].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is experiencing short-term pressure on performance, but it is making strategic breakthroughs in industrial AI and robotics, which are expected to open long-term growth opportunities [1][4] - The company is a leader in process industrial intelligent manufacturing and is expected to benefit from equipment upgrade policies and overseas expansion opportunities [4][6] Financial Performance Summary - In the first half of 2025, the company achieved operating revenue of 3.83 billion yuan, a year-on-year decrease of 9.92%, and a net profit attributable to the parent company of 354 million yuan, down 31.46% year-on-year [5] - The company’s exchange loss was 13.40 million yuan, compared to a gain of 3.01 million yuan in the first half of 2024 [5] - After excluding the impact of exchange losses, the adjusted net profit was 294 million yuan, a decline of 25.82% year-on-year [5] Revenue and Profit Forecast - The revised profit forecast for 2025-2027 is 1.12 billion, 1.29 billion, and 1.55 billion yuan respectively, with EPS projected at 1.41, 1.63, and 1.96 yuan per share [4][8] - The current stock price corresponds to P/E ratios of 36.8, 31.9, and 26.5 for the years 2025, 2026, and 2027 respectively [4][8] Market Opportunities - The demand for process industrial equipment is continuously increasing, with significant growth in the energy, building materials, and paper industries, showing year-on-year increases of 9.32%, 82.58%, and 77.56% respectively [6] - The company is expanding its international strategy, achieving significant breakthroughs in regions such as Southeast Asia, the Middle East, and Central Asia, with notable progress in certification for core products in Saudi Arabia [6] Industrial AI and Robotics Development - The TPT software has entered a phase of large-scale application, generating revenue of 117 million yuan in the first half of 2025, with over 110 successful projects implemented in various industries [7] - The robotics business is also growing rapidly, with revenue of 110 million yuan in the first half of 2025 and new orders totaling 200 million yuan, surpassing the entire performance of 2024 [7]