Investment Rating - The report maintains an "Accumulate" rating for the company [6] Core Views - The company experienced a revenue decline of 13.75% year-on-year in H1 2025, with total revenue of 1.776 billion and a net profit attributable to shareholders of 0.95 billion, down 39.54% year-on-year [1] - The company is transitioning from a traditional design institute to a "think tank technology enterprise," focusing on new fields such as low-altitude economy and green low-carbon initiatives, which have shown over 100% growth [2][3] - The company has established a complete low-altitude economic product system, including three core platforms for airspace service management, low-altitude regulatory services, and AI-integrated inspection [3] Financial Performance - In H1 2025, the company's gross margin was 31.9%, an increase of 1.93 percentage points year-on-year, while the net profit margin was 5.21%, a decrease of 2.55 percentage points year-on-year [4] - The company plans to distribute a cash dividend of 25.26 million (including tax) for H1 2025, with a dividend payout ratio of 26.48% [1] - The projected net profit for the company from 2025 to 2027 is estimated to be 2.1 billion, 2.3 billion, and 2.6 billion respectively, with corresponding P/E ratios of 58, 52, and 47 [1] Business Segments - The engineering consulting business generated revenue of 1.714 billion in H1 2025, down 7.82% year-on-year, while the engineering contracting business saw a significant decline of 69.1%, with revenue of 0.62 billion [2] - Domestic and overseas revenues for H1 2025 were 1.424 billion and 0.352 billion, respectively, with domestic revenue down 17.14% and overseas revenue up 3.35% year-on-year [2] Future Outlook - The company is expected to face significant pressure in the traditional surveying and design industry, but the growth in emerging businesses such as urban lifelines and multimodal transport is promising [2][3] - The company aims to enhance its cash flow management, with a net cash outflow of 690 million in H1 2025, which is a reduction of 33 million year-on-year [4]

Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of RMB 10.51 [7][6]. Core Views - The company reported a revenue of RMB 1.776 billion for H1 2025, a year-on-year decrease of 13.75%, and a net profit attributable to shareholders of RMB 95.39 million, down 39.54% year-on-year, primarily due to exchange rate losses affecting profit margins [1][6]. - The company is transitioning from a traditional design institute to a "think tank-type technology enterprise," focusing on emerging growth areas such as digitalization, urban lifelines, low-altitude economy, and multimodal transport [1][2]. - Emerging businesses have shown significant growth, with areas like urban lifelines, multimodal transport, low-altitude economy, lightweight detection, green low-carbon initiatives, and road materials achieving over 100% growth [2][6]. Summary by Sections Financial Performance - For H1 2025, the overall gross margin increased by 1.93 percentage points to 31.87%, while the engineering consulting business revenue was RMB 1.714 billion, down 7.82% year-on-year, with a gross margin of 32.36% [2][3]. - The company experienced a significant increase in financial expenses, totaling RMB 45.68 million, primarily due to exchange losses of RMB 41.59 million, compared to a gain of RMB 14.86 million in the same period last year [3][4]. - Operating cash flow improved year-on-year, with a net cash outflow of RMB 690 million, which was a reduction of RMB 33 million compared to the previous year [4]. Business Development - The company is deepening its low-altitude industry ecosystem layout and has participated in the development of provincial standards for low-altitude take-off and landing sites and airspace designation [5]. - The company has developed a comprehensive low-altitude economic product system, including core platforms for airspace service management, low-altitude regulatory services, and AI-based comprehensive inspection [5]. Profit Forecast and Valuation - The profit forecast for 2025-2027 has been adjusted downwards, with net profits projected at RMB 211 million, RMB 227 million, and RMB 239 million, reflecting a decrease of 15.67%, 16.43%, and 17.06% respectively [6][11]. - The company is assigned a PE ratio of 63x for 2025, with an updated target price of RMB 10.51, which corresponds to a 53x PE ratio for the same year [6][12].