Investment Rating - The report maintains an "Accumulate-A" rating for the company [1][6]. Core Views - The company has seen a continuous increase in its order backlog, indicating strong future revenue potential despite a slight decline in revenue due to adjustments in delivery schedules from some downstream aviation customers [5]. - The company is actively expanding into emerging fields such as gas turbines, nuclear power, and marine engineering equipment, with initial success in securing orders for semiconductor equipment components [5]. Financial Performance - For the first half of 2025, the company's revenue was 914 million yuan, a year-on-year decrease of 8.71%, while the net profit attributable to the parent company was 90 million yuan, down 12.76% year-on-year [4]. - The company’s total liabilities reached 2.522 billion yuan, an increase of 45.30% year-on-year, while cash and cash equivalents grew by 66.56% to 539 million yuan [4]. - The order backlog totaled 2.938 billion yuan, reflecting an 8.13% year-on-year increase, with a combined order estimate of approximately 5.968 billion yuan [5]. Earnings Forecast - The expected EPS for 2025, 2026, and 2027 are 1.23 yuan, 1.50 yuan, and 1.82 yuan respectively, with corresponding PE ratios of 30.9, 25.3, and 20.9 based on the closing price of 37.91 yuan on August 29 [6][8].

Financial Performance - The company reported total revenue of 914 million yuan for the first half of 2025, a decrease of 8.71% year-on-year [1] - The net profit attributable to shareholders was 90.30 million yuan, down 12.76% compared to the previous year [1] - The gross margin was 26.62%, a decline of 3.34% year-on-year, while the net margin was 10.28%, down 0.27% [1] - The company experienced a significant increase in inventory, with a year-on-year growth of 38.5% [1] Key Financial Metrics - The company's operating expenses, including sales, management, and financial costs, totaled 77.74 million yuan, accounting for 8.51% of revenue, an increase of 16.93% year-on-year [1] - Earnings per share decreased to 0.59 yuan, down 16.90% from the previous year [1] - The company reported a negative operating cash flow per share of -0.01 yuan, a decline of 171.17% year-on-year [1] Changes in Financial Items - Accounts receivable financing increased by 38.57% due to an increase in bank acceptance bills expected to be discounted [3] - Other receivables rose by 43.37% due to an increase in government subsidy receivables [3] - Long-term equity investments decreased by 82.0% as the company included its joint venture, Deyu Testing, in its consolidated financials [3] - The company’s cash flow from operating activities saw a significant decline of 192.33% due to increased raw material procurement expenses [6] Investment Activity - The net cash flow from investing activities decreased by 345.2% due to increased payments for ongoing projects [7] - The net cash flow from financing activities also dropped by 158.24% as the company used idle funds to temporarily supplement working capital [8] Fund Holdings - The largest fund holding in the company is the Xin'ao Advanced Manufacturing Equity Fund, which has increased its position [10] - Other funds have also increased their holdings, indicating a growing interest in the company despite its recent financial challenges [10]