Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of RMB 96.42 per share [1][5][24] Core Views - The company's performance in the first half of 2025 was under pressure, with revenue and net profit declining significantly due to seasonal factors and delayed payments from government projects [1][2] - The company is positioned as a leader in low-altitude information services, with ongoing expansion of its "Tianmu" system across various provinces and cities, which is expected to improve performance in the second half of the year [1][2] - The report highlights the company's strong gross margin improvement and increased R&D investment, indicating a focus on innovation and high-margin business segments [3][4] Summary by Sections Financial Performance - In 1H25, the company reported revenue of RMB 4.57 million and a net loss of RMB 0.31 million, representing a year-on-year decline of 28.4% and an expanded loss [1] - The gross margin for 1H25 was 26.65%, an increase of 4.76 percentage points year-on-year, attributed to a shift towards higher-margin business segments [3] Business Segments - The company's information system development business generated RMB 3.96 million in revenue in 1H25, down 30% year-on-year, with notable contributions from civil aviation and urban traffic management sectors [2] - The report emphasizes the successful implementation of the "Tianmu" solution in various cities and the acquisition of a national-level project, enhancing the company's market position [2] Future Outlook - The company is expected to consolidate its core business and advance local low-altitude information construction, with significant market opportunities projected in the civil aviation sector [4] - The report forecasts a compound annual growth rate (CAGR) for the civil aviation control business of 31.34% from 2024 to 2026, indicating strong growth potential [5][19] Valuation - The report employs a sum-of-the-parts (SOTP) valuation method, projecting a target market value of RMB 157.63 billion for the company, corresponding to a target price of RMB 96.42 per share [5][24]