Summary of Conference Call Records Company Overview - **Companies Involved**: 华测检测 (HuaCe Testing) and 广电计量 (Guangdian Measurement) - **Industry**: Testing and Measurement Services Key Points from HuaCe Testing 1. **Overall Performance**: HuaCe Testing's 2024 performance is in line with expectations, showing steady growth, but with varied performance across business segments [1][2] 2. **Environmental Testing**: Significant impact from the national soil survey, leading to expected pressure in 2025, with recovery anticipated in 2026 [1][4] 3. **Food and Agricultural Testing**: Maintains steady growth; increased demand from pet food and cosmetics testing [1][4] 4. **Industrial Testing**: Growth linked to industrial value-added; expected low-speed growth in 2025 [1][4] 5. **Consumer Testing**: Benefiting from new energy vehicles and semiconductor testing; currently in a loss-reduction phase [1][4] 6. **Trade Assurance**: High market share and gross margin, maintaining about 10% steady growth over the years [1][4] 7. **Medical and Pharmaceutical Testing**: Facing significant pressure but showing signs of recovery due to increased investment in innovative drug development [1][4][6] 8. **Profitability**: Net profit margin peaked at 18.02% in 2022, expected to decline to 15.33% in 2024 due to various pressures [1][10] 9. **Strategic Development**: Implementing a "123" strategy for differentiated development across business segments, enhancing new business expansion and operational efficiency [1][5] 10. **International M&A**: Successful acquisitions in Southeast Asia, Southern Europe, and South Africa, enhancing service capabilities [1][8][9] Key Points from Guangdian Measurement 1. **Performance in 2025**: Expected revenue of 14.5 to 15 billion, with a year-on-year growth of 7.9% to 11.6% [3][12] 2. **Profitability**: Anticipated net profit of 0.95 to 1 billion, with a year-on-year growth of 19.2% to 25.5% [3][12] 3. **Business Segments**: Traditional business may decline, but advanced manufacturing sectors like new energy vehicles and semiconductors show significant order growth [3][13] 4. **R&D Investment**: R&D expense ratio maintained at around 10%, focusing on new production capabilities [3][13] 5. **Net Profit Margin**: Expected to reach 6.6% in the first half of 2025, with a potential increase to 15% in the next three to five years [3][14][15] 6. **Management Changes**: New management team implemented refined management practices, leading to improved performance and higher dividend payouts [3][17] 7. **Valuation**: Current PE ratio of 24-25, considered relatively low historically, indicating limited downside risk [3][18] Additional Insights - **Market Trends**: Both companies are adapting to market changes and focusing on high-growth sectors to mitigate risks from traditional business declines [1][3][19] - **Future Outlook**: Positive growth outlook for both companies, with HuaCe Testing focusing on operational efficiency and Guangdian Measurement leveraging new management strategies for enhanced profitability [1][3][19]

Market Overview - As of July 13, 2025, there are 268 companies listed on the Beijing Stock Exchange (BSE), with a total share capital of 37.877 billion shares and a circulating share capital of 24.416 billion shares [2] - For the week of July 7-13, the trading volume on the BSE was 5.095 billion shares, a decrease of 16.56% compared to the previous week [3] - The total trading amount for the same week was 107.844 billion yuan, down 22.94% from the previous week [3] - The average trading price during this period was 21.17 yuan, reflecting a decline of 7.64% [3] - The BSE 50 Index fell by 0.41% to 1420.81 points, with 36 stocks rising, 0 remaining flat, and 14 declining [3] New Stock Issuance - During the week of July 7-13, one company received approval for IPO registration, two companies submitted registration, and one company passed the listing committee meeting [5][6] - No companies had their listing applications accepted, nor were there any new listings or subscriptions during this period [5] - As of July 13, 2024, there are 160 companies awaiting review, including 85 that have been accepted and 62 that have been inquired [5] Company Specifics - Zhigao Machinery Co., Ltd. received IPO registration approval on July 5, 2025, and plans to issue up to 21.4815 million shares, raising approximately 395 million yuan for projects including a production line for intelligent drilling rigs [7][8] - Zhigao Machinery reported revenues of 795 million yuan, 840 million yuan, and 888 million yuan for 2022, 2023, and 2024 respectively, with net profits of 88.9874 million yuan, 104 million yuan, and 105 million yuan [8] - Aomisen Smart Equipment Co., Ltd. and Sanxie Electric Co., Ltd. both submitted registration on July 11, 2025, aiming to raise 165 million yuan and 159 million yuan respectively for their projects [10][11] - Aomisen's revenues were 279 million yuan, 325 million yuan, and 358 million yuan from 2022 to 2024, while Sanxie's revenues were 287 million yuan, 362 million yuan, and 420 million yuan for the same period [11] IPO Progress - Beikang Detection Technology Co., Ltd. passed the listing committee meeting on July 11, 2025, and plans to raise 175 million yuan for advanced detection instrument development and capacity building [13] - Beikang's revenues were 91.7409 million yuan, 110 million yuan, and 148 million yuan from 2022 to 2024, with net profits of 31.9632 million yuan, 45.5812 million yuan, and 55.1325 million yuan [13]

Summary of Huace Testing Conference Call Company Overview - **Company**: Huace Testing - **Industry**: Testing and Inspection Services Key Points Financial Performance - In Q2 2025, Huace Testing achieved a significant single-digit growth in revenue despite a high base effect from the previous year, with net profit growth between 7% and 9.6% compared to market expectations of 0% to 5% [2][3] - The company’s revenue for the food segment is expected to grow by 10% to 15%, driven by new product lines in pet food and agricultural products, as well as increased domestic food safety concerns [2][4] - The medical and pharmaceutical segment showed slight growth, entering a phase of reduced losses, with a recovery in CRO orders and accelerated development of new medical device businesses [2][5] - The environmental segment faced revenue pressure due to a high base from the previous year but is expected to recover in the second half of the year [2][5] - The consumer products segment, particularly automotive testing, exceeded expectations, and chip testing is anticipated to improve after previous profit drag [2][5] Segment Performance - **Food Segment**: Expected to maintain high growth due to increased food safety awareness and contributions from the South African acquisition [2][4] - **Medical and Pharmaceutical Segment**: Anticipated to achieve double-digit growth in the second half of 2025, benefiting from reduced base pressure and positive developments in other businesses [2][4][6] - **Environmental Segment**: Revenue is expected to recover as base pressure eases [2][6] - **Consumer Products and Industrial Segment**: Continuous recovery and accelerated development are expected, with ship oil testing projected to grow by 20% to 30% due to new regulations [2][5] Profitability and Cash Flow - The overall profit level showed significant recovery in Q2 2025, with improved gross margins and good cash flow performance, expecting to recover approximately 10 million yuan [2][7] - The company is transitioning from a state of no cash recovery in the previous year to normal cash recovery in the current year [2][7] Future Outlook - For the second half of 2025, Huace Testing is expected to continue its recovery and accelerate growth across all major business segments [2][6] - The company aims for a minimum performance of 1.02 billion yuan, with potential to exceed 1.05 billion yuan [2][8] - The past three years of valuation adjustments were influenced by economic downturns, unmet internationalization expectations, and foreign capital withdrawal, but improvements are now evident [2][9][10] - The company is positioned for a turning point in performance and cash flow, with a projected growth rate of 15% to 20% as it expands into international markets [2][11] Strategic Initiatives - Huace Testing is focusing on international expansion, particularly in South Africa, Southeast Asia, and Europe, with an emphasis on acquisitions in consumer, food, ESG, and transportation sectors [2][4][8][11] - The company is expected to benefit from a more favorable foreign capital structure and improved market conditions [2][9][11]

Macro Strategy - The impact of real estate on China's economy has significantly weakened, with a projected GDP contribution from the real estate sector of approximately 13 trillion yuan in 2024, accounting for 9.6% of total GDP, down from 16.9% in 2016 [8][9] - Despite negative growth in real estate investment and sales, there is an expectation of stabilization in the market, driven by policies such as special bonds for purchasing existing properties [8][9] Fixed Income - The expected listing price range for the China General Nuclear Power Corporation's convertible bond is between 126.83 and 140.94 yuan, with a subscription rate of 0.0140% [10][11] - The bond has a total issuance scale of 4.9 billion yuan, with a credit rating of AAA and a yield to maturity of 1.66% [10][11] Industry Analysis Jerry Holdings - Jerry Holdings has secured a contract for a natural gas booster station project in Algeria worth approximately 8.5 billion USD, enhancing its presence in the North African oil and gas market [12][14] - The company maintains a profit forecast of 3.03 billion yuan for 2025, with a price-to-earnings ratio of 12, 10, and 9 for 2025-2027 [12][14] Ascentage Pharma - Ascentage Pharma's APG-2575 has received conditional approval in China, marking it as the first domestic Bcl-2 inhibitor, with revenue forecasts of 519 million, 3.215 billion, and 2.095 billion yuan for 2025-2027 [15][16] - The drug is expected to provide a new treatment option for patients with chronic lymphocytic leukemia/small lymphocytic lymphoma [15][16] Chongqing Department Store - The company reported a 9% year-on-year increase in net profit for H1 2025, despite a 10.45% decline in revenue, primarily due to a shift towards new energy vehicles [5][16] - The profit forecast for 2025-2027 is maintained at 1.41 billion, 1.50 billion, and 1.58 billion yuan, with a price-to-earnings ratio of 9, 8, and 8 [5][16] Huace Testing - Huace Testing anticipates a year-on-year net profit growth of 8% to 10% for Q2 2025, driven by traditional business innovations and expansion into new markets [17][18] - The profit forecast for 2025-2027 is set at 1.06 billion, 1.17 billion, and 1.31 billion yuan, with a price-to-earnings ratio of 20, 18, and 16 [17][18] Changjiang Power - The company aims to achieve a power generation target of 300 billion kilowatt-hours in 2025, with profit forecasts of 35.028 billion, 36.715 billion, and 37.087 billion yuan for 2025-2027 [19][20] - The current price-to-earnings ratio is 20.9, 19.9, and 19.7, with a projected dividend yield of 3.35% [19][20]

Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 24.5 yuan [2][8]. Core Insights - The company is expected to achieve revenue of 14.5-15.0 billion yuan in the first half of 2025, representing a year-on-year growth of 7.91-11.63%. The net profit attributable to the parent company is projected to be 950-1000 million yuan, reflecting a year-on-year increase of 19.2-25.48% [2][4]. - The second quarter of 2025 saw revenue growth exceeding expectations, with a year-on-year increase of 10.05%-16.67%, and net profit growth of 14.88%-21.25% [2][8]. - The company benefits from demand in special industries, including new energy vehicles, aerospace, and integrated circuits, leading to rapid growth in technology innovation-related business orders [8]. Financial Performance Summary - The company is projected to achieve total revenue of 36.24 billion yuan in 2025, with a net profit of 4.08 billion yuan, representing a year-on-year growth of 15.9% [8]. - The financial indicators show a steady increase in revenue and net profit over the next few years, with expected revenue of 40.10 billion yuan in 2026 and 44.30 billion yuan in 2027 [4][8]. - The company’s earnings per share (EPS) is expected to rise from 0.60 yuan in 2024 to 0.97 yuan in 2027, indicating a positive growth trajectory [4][8]. Strategic Focus - The company is focusing on high-growth sectors such as reliability and environmental testing, integrated circuits, and data science analysis, positioning itself as a leader in these fields [8]. - The management reform and shift towards a profit-centered strategy are expected to enhance profitability, with profit growth anticipated to outpace revenue growth [8].

Core Viewpoints - The mechanical industry is expected to outperform the market, with a focus on high-quality leading companies and structural growth opportunities [15][5][24] - The industry is undergoing a transformation driven by domestic upgrades, self-sufficiency, and accelerated overseas development [15][20] Industry Overview and Outlook - The core equipment localization is fundamental for the rise of the industry, breaking through bottlenecks in high-end equipment is essential for true autonomy and industrialization [15] - The trend of industrial upgrading is inevitable, with advancements in digitalization and energy transformation enhancing social efficiency and reducing costs [15] - The development of exports is transitioning from point to surface, with competitive manufacturing enterprises moving from import substitution to export substitution [15] Investment Strategy - The report recommends focusing on emerging growth sectors and export-driven leading companies, particularly in areas such as humanoid robots, AI infrastructure, and coal chemical equipment [25][26] - Key recommended stocks include Huace Testing, Guodian Measurement, and Yizhiming, among others [24][2] Key Recommendations - The report highlights specific companies for investment, including: - Humanoid Robots: Hengli Hydraulic, Huichuan Technology, and Zhenyu Technology [26] - AI Infrastructure: Yingliu Technology and Haomai Technology [28] - Engineering Machinery: Hengli Hydraulic, XCMG, and Sany Heavy Industry [29] - Nuclear Power Equipment: Jiadian Co., Zhongmi Holdings, and Jiangsu Shentong [29] - General Equipment: Huichuan Technology, Green Harmonic, and Baichu Electronics [29] Performance Tracking - In June, the mechanical industry index rose by 2.82%, outperforming the CSI 300 index by 0.32 percentage points, with stable valuation levels [6][11] - The manufacturing PMI index for June was reported at 49.70%, indicating a slight improvement [6][12] Financial Projections - The report provides forecasts for key companies, indicating resilience in operations, with expected revenue and profit growth across various sectors [31] - For example, Hengli Hydraulic is projected to achieve a revenue of 27.68 billion yuan in Q2 2025, with a net profit of 7.96 billion yuan [31]

Core Viewpoint - The company, China National Inspection Testing Holding Group Co., Ltd., anticipates a significant decline in net profit for the first half of 2025, projecting a net profit of approximately 5.97 million yuan, which represents a decrease of about 77.36% compared to the same period last year [2]. Financial Performance Summary - The estimated net profit attributable to the parent company for the first half of 2025 is 5.9654 million yuan, down approximately 20.3782 million yuan from the previous year [2]. - The projected net profit after deducting non-recurring gains and losses is approximately -17.1117 million yuan, a decrease of about 31.0108 million yuan year-on-year, reflecting a 223.11% decline [2]. - In the same period last year, the total profit was 34.4928 million yuan, with a net profit attributable to the parent company of 26.3437 million yuan and a net profit after deducting non-recurring gains and losses of 13.8991 million yuan [2]. Business Environment and Strategy - The primary reasons for the anticipated decline in performance include a downturn in the traditional business sector, reduced demand for related testing services, price declines, and intensified industry competition [2]. - The company is actively pursuing a business transformation strategy, enhancing market development and internal collaboration, and implementing lean management practices to improve market share and competitiveness [2].

Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Views - The company is expected to achieve revenue of 1.45-1.50 billion yuan in the first half of 2025, representing a year-on-year increase of 7.91%-11.63%. The net profit attributable to the parent company is forecasted to be 95-100 million yuan, reflecting a year-on-year growth of 19.2%-25.5% [2][6]. - In Q2 2025, the company anticipates revenue of 832-882 million yuan, with a year-on-year increase of 10.1%-16.7%, and a net profit attributable to the parent company of 90-95 million yuan, showing a year-on-year growth of 14.9%-21.2% [2][6]. - The company has seen a significant increase in orders related to technological innovation, particularly in strategic sectors such as special industries, automotive, integrated circuits, and data science [12]. Summary by Sections Financial Performance - The company achieved a net profit margin of approximately 6.6% in the first half of 2025, an increase of about 0.7 percentage points year-on-year. For Q2, the net profit margin is estimated at around 10.8%, up by approximately 0.4 percentage points year-on-year [12]. - The company has maintained a research and development expense ratio of around 10% over the past few years, positioning itself favorably in various emerging industries [12]. Management Changes - A new management team was established at the end of 2023, focusing on a younger and more professional board. The company is implementing refined management practices and enhancing net profit assessments [12]. - The company has initiated a stock incentive plan and has conducted share buybacks amounting to approximately 390 million yuan, alongside a record cash dividend of about 224 million yuan [12]. Earnings Forecast and Valuation - The company is projected to achieve revenues of 3.57 billion yuan, 3.98 billion yuan, and 4.45 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 11.3%, 11.6%, and 11.8% [12]. - The net profit attributable to the parent company is expected to reach 423 million yuan, 512 million yuan, and 625 million yuan for the same years, with growth rates of 20.0%, 21.2%, and 22.1% respectively [12].

Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Views - The company, HuaCe Testing, forecasts a net profit attributable to shareholders of 463-471 million yuan for the first half of 2025, representing a year-on-year increase of 6.06%-7.80%. For Q2, the net profit is expected to be 327-334 million yuan, reflecting a year-on-year growth of 7.5%-10.0%. This performance demonstrates the resilience of the company as a comprehensive national testing institution amidst macroeconomic pressures [2][6][7]. Summary by Sections Revenue Performance - In 2024, the environmental testing sector experienced high growth due to the third national soil survey, but this is expected to decline in 2025, creating revenue growth pressure. The company is countering this by enhancing marine environmental monitoring and other emerging demands. The food and agricultural testing sector is driven by innovation, while industrial product testing is seeing improvements in gross margins due to upgrades in construction testing services [7]. Profitability - The company is advancing lean management practices and exploring AI, digitalization, and automation to enhance operational efficiency. The implementation of a "Talent Refinement Plan" aims to continuously improve organizational capabilities and innovation vitality, contributing to steady net profit growth [7]. International Expansion - The company is actively pursuing international acquisitions, including a planned acquisition of South Africa's Safety SA, which is expected to enhance its service capabilities in Africa. This acquisition is part of the company's broader internationalization strategy [7][13]. Financial Forecast - Revenue projections for 2025-2027 are 6.521 billion yuan, 7.191 billion yuan, and 7.921 billion yuan, with year-on-year growth rates of 7.18%, 10.28%, and 10.15%, respectively. Net profit attributable to shareholders is forecasted to be 1.014 billion yuan, 1.143 billion yuan, and 1.287 billion yuan for the same period, with corresponding growth rates of 10.1%, 12.6%, and 12.7%. The price-to-earnings (PE) ratios are estimated at 20.0x, 17.8x, and 15.8x [7][13].

Core Viewpoint - The company, Huace Testing Certification Group Co., Ltd., has projected a growth in net profit for the second quarter and the first half of 2025, indicating a positive performance trend compared to the previous year [1][2]. Performance Forecast - For the second quarter of 2025, the expected net profit attributable to shareholders is between 326.86 million yuan and 334.46 million yuan, representing a year-on-year growth of 7.5% to 10% [1]. - For the first half of 2025, the expected net profit attributable to shareholders is between 463.05 million yuan and 470.65 million yuan, with a year-on-year growth of 6.06% to 7.80% [1]. - The net profit after deducting non-recurring gains and losses for the second quarter is projected to be between 310.54 million yuan and 318.14 million yuan, with a growth of 7.01% to 9.63% compared to the previous year [1]. Reasons for Performance Changes - The company attributes the expected growth in net profit to a focus on strategic goals and the implementation of the "123 strategy," which emphasizes customer orientation and quality service [1]. - The company has been actively exploring AI, digitalization, and automation to enhance operational efficiency, alongside a talent development plan to improve organizational capabilities [1]. - Strategic mergers and international expansion are also expected to contribute to long-term growth [1]. Non-Recurring Gains and Losses - The estimated impact of non-recurring gains and losses on the company's semi-annual net profit is approximately 27.5 million yuan, compared to 33.78 million yuan in the same period last year [2]. Audit Status - The performance forecast is based on preliminary calculations by the company's finance department and has not been audited by an external auditor [3].