Investment Rating - The investment rating for the company is "Buy" (maintained) [1][3] Core Views - The company reported a revenue of 130 million yuan for H1 2025, representing a year-on-year increase of 22.04%. The net profit attributable to the parent company was 30.53 million yuan, up 35.87% year-on-year, and the net profit after deducting non-recurring gains and losses was 28.39 million yuan, an increase of 50.83% [3] - The growth in revenue is driven by the sales of ultrasonic water meters and energy management projects, with ultrasonic water meter revenue reaching 55.56 million yuan, a year-on-year increase of 84.14%, and energy management revenue at 13.05 million yuan, up 74.19% [3] - The gross margin remained stable at 48.23%, compared to 49.14% in H1 2024, while selling expenses decreased by 375,000 yuan to 12.38 million yuan [3] - The company is increasing its investment in the construction of an intelligent production line for IoT ultrasonic instruments, with 54.51% of the funds for the "IoT Intelligent Ultrasonic Meter Industrialization Project" utilized by H1 2025, expected to be operational by June 30, 2026 [3] - The company has raised its profit forecasts for 2025-2027, expecting net profits of 88 million yuan (previously 71 million yuan), 101 million yuan (previously 85 million yuan), and 104 million yuan for 2027, respectively [3] Industry Overview - The penetration rate of smart water meters in China is expected to reach 60% by 2025, indicating significant growth potential for the company [4] - The government is promoting infrastructure investments in urban and rural water supply systems, which will further drive demand for smart water meters [4] - The heating industry is also undergoing reforms, with the government accelerating the implementation of heating metering and pricing reforms, which will benefit the company's energy management projects [4]