Core Insights - The recent financial report of Fumiao Technology (688350) indicates a decline in net profit by 19.17% year-on-year, with total revenue decreasing by 5.8% to 721 million yuan [1] - The company's gross margin improved to 15.27%, an increase of 5.83% year-on-year, while the net margin decreased to 2.71%, down by 4.61% [1] - The company is currently in the early stages of developing a three to five-year strategic cooperation plan with its new controlling shareholder, focusing on industry dynamics and market changes [4] Financial Performance - Total revenue for the first half of 2025 was 721 million yuan, down from 765 million yuan in 2024, representing a decline of 5.8% [1] - Net profit attributable to shareholders was 20.5153 million yuan, compared to 25.3793 million yuan in the previous year, a decrease of 19.17% [1] - The company's operating cash flow per share fell significantly by 45.78% to 0.34 yuan [1] Cost and Efficiency Metrics - The total of selling, administrative, and financial expenses reached 55.9575 million yuan, accounting for 7.76% of revenue, which is an increase of 13.79% year-on-year [1] - The return on invested capital (ROIC) for the previous year was 0.65%, indicating weak capital returns, with a historical median ROIC of 8.8% since the company went public [3] Debt and Receivables - The company’s interest-bearing debt increased by 51.19% to 754 million yuan, raising concerns about its debt situation [1] - Accounts receivable rose by 20.64% to 330 million yuan, suggesting potential liquidity issues [1][3] Strategic Development - The company is exploring full water treatment solutions for steel mills as a typical application scenario and aims to leverage its new shareholder's global network for overseas expansion [4] - The strategic cooperation plan is still in preliminary discussions, with no finalized details yet [4]