Core Viewpoint - Huafeng Power Co., Ltd. (605100.SH) faced significant performance pressure in the first half of 2025, with a 33.10% year-on-year decline in revenue and a 71.94% drop in net profit, primarily due to structural changes in demand for traditional core components and setbacks in overseas operations [2][4]. Financial Performance - The company reported a revenue of 373 million yuan in the first half of 2025, down 33.10% year-on-year, with diesel engine and unit revenue at 58 million yuan and component revenue at 306 million yuan [3][4]. - The net profit attributable to shareholders was 13.15 million yuan, a significant decline of 71.94% year-on-year, with a non-recurring net profit of 11.55 million yuan, down 74.66% [4]. Market Challenges - The decline in performance was attributed to market demand fluctuations, changes in customer product structures, and strategic adjustments leading to reduced orders [4]. - The heavy truck market in China saw a total sales volume of 539,000 units in the first half of 2025, a year-on-year increase of 6.9%, but the market is experiencing a bifurcation between traditional business recovery and rapid growth in new energy vehicles [4]. Overseas Operations - The company's overseas operations, particularly in India, faced challenges due to strategic adjustments by key clients and changes in visa policies, leading to a 64.21% decrease in revenue and a 96.49% drop in net profit for its Indian subsidiary [5]. - Despite these challenges, the company is focusing on expanding its overseas market presence, particularly in data centers and communication base stations, with an increase in export orders for generator sets [5]. Strategic Initiatives - Huafeng Power is actively seeking transformation by focusing on new business areas, particularly the data center market, which is experiencing increased demand for backup power solutions [6]. - The company signed a strategic cooperation agreement with Shanghai Jipian AI Technology Co., Ltd. to supply power equipment for a computing center, marking a significant step in its business expansion [6]. New Energy Development - To address its shortcomings in the new energy heavy truck sector, Huafeng Power established a joint venture, Huafeng New Energy (Changzhou) Co., Ltd., to focus on developing new energy batteries and enhancing international competitiveness [7][8]. - The company is also collaborating with the Shanghai Institute of Silicate, Chinese Academy of Sciences, on a solid-state battery project, which is crucial for its long-term competitiveness in the new energy market [8].