Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 13.30 [7][8]. Core Views - The company reported a revenue of RMB 1.673 billion for H1 2025, representing a year-over-year increase of 7.03%, and a net profit attributable to the parent company of RMB 63.25 million, up 18.68% year-over-year [1][7]. - The second quarter of 2025 saw revenue of RMB 991 million, a year-over-year increase of 0.70% and a quarter-over-quarter increase of 45.45%, with net profit of RMB 38.92 million, reflecting a year-over-year increase of 20.86% and a quarter-over-quarter increase of 59.97% [1][7]. - The company is expected to benefit from the ongoing major infrastructure projects in the western region, such as the "Yaxia" hydropower station, which will drive demand for its products [1][5]. Summary by Sections Financial Performance - For H1 2025, the company achieved a revenue of RMB 1.673 billion, with a net profit of RMB 63.25 million and a non-recurring net profit of RMB 52.96 million [1][7]. - The comprehensive gross margin for H1 2025 was 34.75%, slightly down by 0.12 percentage points year-over-year [2]. - The company’s expense ratio for H1 2025 was 27.72%, down 0.34 percentage points year-over-year, indicating improved cost absorption capabilities [3]. Product Performance - Sales of high-performance water-reducing agents and functional materials showed positive trends, with revenues of RMB 867 million and RMB 347 million respectively, reflecting year-over-year increases of 6.3% and 25.2% [2]. - The company has expanded its functional materials offerings, with significant growth in new materials, which has been well-received by customers [4]. Market Expansion - The company has intensified its efforts in the western region, achieving notable results in sectors such as hydropower, nuclear power, and railways, participating in projects like the Sichuan-Tibet Railway and the Haitaichangjiang Tunnel [4]. - The company has also expanded its overseas business, establishing subsidiaries in the Philippines, Singapore, and Thailand, thereby broadening its international market presence [4]. Profit Forecast and Valuation - The company’s net profit forecasts for 2025-2027 are RMB 164 million, RMB 206 million, and RMB 241 million respectively, with corresponding EPS of RMB 0.38, RMB 0.48, and RMB 0.56 [5][11]. - The target price has been adjusted to RMB 13.30, based on a 35x PE valuation for 2025, reflecting the company's strong project experience and first-mover advantage in major infrastructure projects [5].