Investment Rating - The investment rating for the company is "Outperform the Market" [7] Core Views - The company's performance in the first half of 2025 showed a decline in revenue and profit due to a challenging consumer environment, but it managed to increase its market share in core categories, demonstrating operational resilience [1][2] - The traditional business experienced slight declines, while the new energy business showed steady growth, with a revenue increase of 33.5% in the first half of 2025 [2] - The company is actively incubating new businesses and accelerating international expansion, with significant partnerships established in the data center sector and a growing presence in solar lighting and new energy solutions [3] Summary by Sections Financial Performance - In H1 2025, the company achieved revenue of 8.17 billion yuan, down 2.6%, and a net profit of 2.06 billion yuan, down 8.0% [1] - Q2 2025 revenue was 4.25 billion yuan, down 7.4%, with a net profit of 1.08 billion yuan, down 17.2% [1] - The core categories saw an increase in market share despite the overall decline in revenue and profit [1] Business Segments - Electrical connections revenue in H1 2025 was 3.66 billion yuan, down 5.4%, while smart electrical lighting revenue was 4.09 billion yuan, down 2.8% [2] - The new energy business generated 390 million yuan in revenue, up 33.5%, with over 30,000 offline terminal points developed in the C-end market [2] Cost Management and Profitability - The gross margin in Q2 2025 was 43.5%, a slight decrease of 0.1 percentage points, while the net margin was 25.5%, down 3.0 percentage points [3] - The sales expense ratio decreased to 7.0%, primarily due to reduced marketing and advertising expenses [3] Future Outlook - The profit forecast has been adjusted downwards, with expected net profits of 4.38 billion yuan, 4.70 billion yuan, and 5.10 billion yuan for 2025, 2026, and 2027 respectively, reflecting a growth of 2.5%, 7.4%, and 8.5% [4] - The current stock price corresponds to a PE ratio of 19.4, 18.1, and 16.7 for the years 2025, 2026, and 2027 respectively [4]

Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, while the new energy business showed significant growth [3][4]. Financial Performance - In the first half of 2025, the company achieved revenue of 8.17 billion, a year-over-year decrease of 2.6%, and a net profit of 2.06 billion, down 8.0% year-over-year [3]. - For Q2 2025, revenue was 4.25 billion, a year-over-year decline of 7.4%, and net profit was 1.08 billion, down 17.2% year-over-year [3]. - The company announced a share buyback plan of 250 to 400 million, with 4.97 million shares repurchased by the end of July, totaling 250 million [3]. Business Segments - Traditional business segments faced short-term pressure, while the new energy sector experienced robust growth, with revenue from electric connection products, smart electrical lighting, and new energy businesses at 3.66 billion, 4.09 billion, and 390 million respectively, showing year-over-year changes of -5.4%, -2.8%, and +33.5% [4]. - The electric connection product segment focused on high-end fashion, launching new products to enhance its portfolio, while the smart electrical business increased market share with new product launches [4]. - The new energy business introduced new charging pile products and upgraded its storage product matrix, focusing on European household storage [4]. Profitability and Cost Management - The gross margin for H1 2025 was 42.3%, a decrease of 0.6 percentage points year-over-year, while Q2 2025 gross margin was 43.5%, down 0.1 percentage points year-over-year [5]. - The company improved its gross sales difference by 0.6 percentage points year-over-year in H1 2025 and by 1.4 percentage points in Q2 2025 [5]. - The company maintained a strong cash position, with 13.0 billion in cash and cash equivalents at the end of H1 2025, representing 64.4% of total assets [5]. - Operating cash flow for H1 2025 was 2.38 billion, an increase of 0.7% year-over-year, with Q2 2025 operating cash flow at 970 million, up 14.6% year-over-year [5].

Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, reflecting challenges in the domestic market due to weak demand in related industries, particularly influenced by low new housing completions [1][2] Financial Performance - In H1 2025, the company achieved revenue of 8.17 billion yuan, a year-on-year decrease of 2.6%, and a net profit attributable to shareholders of 2.06 billion yuan, down 8.0% year-on-year [1] - Q2 2025 saw revenue of 4.25 billion yuan, a decline of 7.4% year-on-year, with net profit attributable to shareholders at 1.08 billion yuan, down 17.2% year-on-year [1] - The company's gross margin in Q2 2025 was 43.5%, a slight decrease of 0.1 percentage points year-on-year, indicating stable profitability despite revenue challenges [2] Business Segment Performance - The electrical connection business generated revenue of 3.662 billion yuan, down 5.37% year-on-year, while the smart electrical lighting business reported revenue of 4.094 billion yuan, a decrease of 2.78% year-on-year [2] - The new energy business, however, saw a significant increase in revenue, reaching 386 million yuan, up 33.52% year-on-year, indicating growth potential in this segment [2] Strategic Initiatives - The company is actively expanding its data center and solar lighting business, having established good partnerships with major clients like ByteDance and Tencent [3] - New product developments in high-power direct current PDU and integrated solar lighting solutions are underway, aimed at meeting diverse customer needs [3] Investment Outlook - The company is positioned as a leader in the electrical industry, with a clear long-term growth strategy, particularly in its core product categories and new energy initiatives [3] - Projected net profits for 2025-2027 are 4.24 billion, 4.54 billion, and 4.96 billion yuan respectively, with a maintained "buy" rating based on the company's growth potential [3]