Core Viewpoint - The focus on developing the economy should be on the real economy, emphasizing the importance of building a strong manufacturing nation to respond to changing times and maintain control over development [1][3]. Group 1: Manufacturing Industry's Role - The "reasonable proportion" of manufacturing refers to maintaining a balance where manufacturing's share of GDP does not become too high or too low, reflecting the relationship between manufacturing and other sectors like services [2]. - Historically, many economic powers began with a strong manufacturing base, and the risk of "hollowing out" industries must be avoided to ensure stable economic growth and employment [2][3]. Group 2: Strategic Importance of Manufacturing - For China during the 14th Five-Year Plan period, manufacturing is crucial for enhancing economic strength, technological capability, and overall national power, as well as for improving the quality of life for citizens [3]. - The global competition necessitates that China's manufacturing sector continues to advance, as it has been the world's largest manufacturing nation for several years [3][4]. Group 3: Achievements and Challenges - By 2024, China's manufacturing value added is expected to account for nearly 30% of the global total, with over 220 major industrial products produced in the highest quantities worldwide [4]. - Despite these achievements, challenges such as insufficient innovation capabilities and technological gaps in key industries remain, which must be addressed to strengthen the manufacturing sector [4]. Group 4: Future Directions - The 14th Five-Year Plan outlines specific tasks to enhance advanced manufacturing, upgrade traditional industries, and cultivate emerging industries, focusing on quality improvement and transformation [3][4]. - The policy direction emphasizes the need for a clear commitment to developing the real economy, which will lead to stronger manufacturing capabilities and stability [4].

Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 12.54 [6][7]. Core Views - The company reported a revenue of RMB 5.2 billion for 2024, a year-on-year increase of 31.8%, but the net profit attributable to the parent company was RMB 212 million, a decrease of 0.8% year-on-year, which was below expectations due to intensified industry competition and unexpected declines in gross margin [1][4]. - The company signed new contracts worth RMB 5.4 billion in 2024, representing a year-on-year increase of 9.5%, with a backlog of orders amounting to RMB 2.9 billion, indicating potential for future growth [1][2]. - The semiconductor and related sectors showed significant revenue growth, with the semiconductor segment achieving a 29% year-on-year increase, driven by domestic substitution trends [2][4]. Summary by Sections Financial Performance - In Q4 2024 and Q1 2025, the company achieved revenues of RMB 1.41 billion and RMB 1.04 billion, respectively, with year-on-year declines of 2.8% and 9.4% [1][2]. - The overall gross margin for 2024 decreased by 1.4 percentage points to 10.0%, but showed improvement in Q4 2024 and Q1 2025, with gross margins of 9.7% and 10.3%, respectively [2][3]. Expense Management - Management expenses increased significantly by 53% year-on-year in 2024, primarily due to business expansion and increased personnel costs [3]. - The company maintained a net cash flow from operating activities of RMB 220 million in 2024, which was stable compared to the previous year [3]. Profit Forecast and Valuation - The net profit forecasts for 2025, 2026, and 2027 have been adjusted to RMB 236 million, RMB 265 million, and RMB 282 million, respectively, reflecting a downward revision due to anticipated delays in capital expenditures in the downstream electronics industry [4][5]. - The company is assigned a PE ratio of 28x for 2025, with a target price adjustment to RMB 12.54, down from RMB 13.52 [4][6].