Core Viewpoint - The report highlights that Haixing Electric's performance in the first half of 2025 fell short of expectations due to increased counter-cyclical investments and industry cycle impacts, leading to a decline in both revenue and net profit [2][4]. Financial Summary - Haixing Electric reported a total revenue of 1.92 billion yuan for the first half of 2025, representing a year-on-year decrease of 14.7% [2]. - The net profit attributable to shareholders was 400 million yuan, down 25.7% year-on-year [2]. - The comprehensive gross margin for the first half of 2025 was 41.56%, a decrease of 2.64% compared to the same period last year [2]. - The period expense ratio increased to 17.58%, up 0.57% from the previous year [2]. Business Development - The company is actively participating in domestic and overseas markets, securing significant contracts such as 140 million yuan from the State Grid and 49.9 million yuan from Southern Power Grid [3]. - Haixing Electric is expanding its marketing channels in key countries and new markets, with the launch of the "Orca" platform and the commencement of operations at a smart ultrasonic water meter factory in South Africa [3]. - The company aims for multi-market and multi-category collaborative development while consolidating its domestic base and expanding overseas [3]. Competitive Advantage - Haixing Electric focuses on providing comprehensive solutions and localized strategies, enhancing its brand competitiveness [4]. - The company has achieved a revenue share of approximately 60% from system software and solutions in its overseas smart electricity business in 2024 [4]. - By leveraging product and service capabilities, Haixing Electric has established deep customer relationships and built a competitive brand advantage [4]. Profit Forecast and Investment Rating - The projected net profits for Haixing Electric from 2025 to 2027 are 1.023 billion yuan, 1.188 billion yuan, and 1.387 billion yuan, respectively, with corresponding EPS of 2.10, 2.44, and 2.85 yuan [4]. - The current stock price corresponds to PE ratios of 13, 11, and 10 times for 2025 to 2027 [4]. - The report maintains a "strong buy" rating for the company [4].