Core Viewpoint - The acquisition of 100% equity in the Extreme Testing Center by the company is a significant strategic milestone, enhancing its core competitiveness and bringing multiple positive impacts on strategic layout, financial performance, and shareholder returns [2][4][6]. Group 1: Strategic Importance of the Acquisition - The Extreme Testing Center is the only national center in China focused on automotive testing in cold environments, which adds a rare qualification to the company, significantly enhancing its technical authority in seasonal and scenario testing services [4][6]. - This acquisition resolves potential industry competition issues and improves the company's governance structure, aligning with the State-owned Assets Supervision and Administration Commission's requirements for central enterprises [4][6]. - The acquisition allows the company to extend its service capabilities to extreme environments, creating a comprehensive testing service system that includes both conventional and extreme conditions, thus expanding its business boundaries [6][7]. Group 2: Financial Implications - The cash acquisition avoids equity dilution, protecting existing shareholders' interests while optimizing capital allocation efficiency [7][8]. - The Extreme Testing Center has shown strong financial performance, with a revenue of 71.34 million yuan and a net profit of 15.27 million yuan in the first four months of 2025, indicating a return on equity (ROE) of 15.08% [8][9]. - The integration of the Extreme Testing Center is expected to enhance the company's key financial metrics, directly increasing net profit and ROE post-acquisition [8][9]. Group 3: Shareholder Value and Market Confidence - The acquisition aligns with the company's commitment to value management and is seen as a practical step to enhance intrinsic value and return to investors [10][12]. - The company has consistently implemented cash dividends since its listing, with a total dividend amount of approximately 300 million yuan and a dividend ratio of 61.10% for 2024, indicating a strong commitment to shareholder returns [10][12]. - The management emphasizes that this acquisition is a key move to secure a strategic position in the new energy vehicle testing market, enhancing the company's service capabilities and opening up high-value growth opportunities [12][13].

Core Viewpoint - The Chinese automotive industry is transitioning from scale expansion to quality and efficiency improvement, with the development of new productive forces and brand building being essential for high-quality development [3]. Group 1: Role of China Automotive Engineering Research Institute (China Automotive Research) - China Automotive Research aims to be a technology leader and brand enabler, providing a solid foundation for brands to ascend through collaborative technology creation [3][4]. - The institute has accumulated deep professional capabilities in technology research and development, testing, certification, and standard formulation over its 60 years of operation [3]. Group 2: Technological Advancements and Safety Initiatives - China Automotive Research has developed brand IPs like "Military Standard Extreme Evaluation" to enhance automotive safety under extreme conditions [3]. - The institute has created a testing scenario database covering over 100,000 real road conditions, which helps translate technical labels into user experiences and builds brand confidence [3]. Group 3: Automotive Indices and Consumer Trust - The institute has established three automotive indices: China Insurance Automotive Safety Index, National Intelligent Automotive Safety Index, and China Automotive Health Index, covering over 90% of popular models in the market [4]. - These indices provide objective third-party evaluations across safety, intelligence, and health dimensions, offering clear directions for product improvement and fair references for consumers [4]. Group 4: Industry Collaboration and Future Directions - China Automotive Research is actively integrating resources across the industry chain and has co-established the "Automotive Brand Professional Committee" to promote deep integration of production, education, research, and application [4]. - The institute plans to leverage its expertise in international standards and overseas market testing to support innovation and help more Chinese automotive brands enter the global market [5].

Summary of Key Points Core Viewpoint - The company, China Automotive Engineering Research Institute Co., Ltd. (China Automotive Research), is actively engaging with investors to enhance understanding of its operational strategies and future plans, particularly in the context of the evolving automotive industry towards electrification, intelligence, connectivity, and low-carbon initiatives [1][2]. Group 1: Investor Communication and Engagement - The company held an investor communication meeting on May 9, 2025, in Chongqing to discuss its operational status and strategic execution for 2024 and the first quarter of 2025 [1]. - Various securities firms and investment management companies participated in the meeting, indicating a broad interest from the investment community [1]. Group 2: Industry Trends and Company Positioning - The automotive industry is undergoing significant changes due to the "new four modernizations" (electrification, intelligence, connectivity, and low-carbon), prompting testing institutions to shift from traditional compliance testing to new technology research and testing [2]. - China Automotive Research has a long history and is one of the earliest institutions to obtain regulatory testing qualifications, accumulating extensive experience in testing services and product development [3]. Group 3: Service Capabilities and Market Strategy - The company is enhancing its service capabilities by focusing on three main technical lines: safety, green technology, and user experience, while increasing R&D investment [3]. - It has established a comprehensive service capability that includes development, testing, certification, evaluation, and after-sales services, effectively addressing pain points in product development for automotive enterprises [3]. Group 4: Environmental and Health Initiatives - The company has launched the China Automotive Health Index and services in the "dual carbon" field, focusing on carbon emission accounting and green low-carbon assessments [4]. - The company is actively involved in setting new emission standards and expanding its capabilities in environmental testing, despite a slight decline in the overall market for automotive emission testing due to the rise of electric vehicles [4]. Group 5: Infrastructure Development and Internationalization - The construction of the East China headquarters is nearing completion, with 90% of equipment procurement achieved, expected to be operational by the end of 2025 [5]. - The company is focusing on internationalization, aiming to provide comprehensive quality technical services to support Chinese automotive enterprises in their global operations [5][6]. Group 6: Hydrogen Energy Initiatives - The National Hydrogen Energy Power Quality Inspection and Testing Center commenced operations in January 2024, providing testing services across the hydrogen energy industry chain [6][7]. - The company is developing hydrogen-related detection equipment and core components, with plans to expand into various hydrogen energy applications, including hydrogen power generation and storage [7].