Core Viewpoint - The company reported strong financial performance in the first half of 2025, with significant revenue and profit growth driven by accelerated order deliveries and increased EPC construction business revenue [1][2]. Financial Performance - In H1 2025, the company achieved revenue of 1.843 billion yuan, a year-on-year increase of 22.00%, and a net profit attributable to shareholders of 126 million yuan, up 106.69% year-on-year [1]. - The gross margin for H1 2025 was 19.67%, an increase of 2.80 percentage points year-on-year, while the net profit margin was 6.85%, up 2.59 percentage points year-on-year [2]. - The company’s Q2 2025 revenue reached 1.097 billion yuan, reflecting a year-on-year increase of 30.95% and a quarter-on-quarter increase of 46.88% [1]. Operational Efficiency - The company delivered 14 vessels in total for design and construction, 39 vessels for design, and 9 vessels for supervision in H1 2025, showing an increase in delivery speed compared to H1 2024 [3]. - The EPC business revenue reached 1.697 billion yuan, a year-on-year increase of 32.33%, driven by improved production efficiency through enhanced coordination and new processes [3]. Order Backlog and Market Position - As of the end of H1 2025, the company had a substantial order backlog, including 1.31 billion yuan for marine engineering design, 470 million yuan for supervision, and 14.143 billion yuan for construction, indicating a 1.3% increase compared to the end of 2024 [3][4]. - The company is positioned as a leader in the ship design and research industry, benefiting from government support for deep-sea technology and the growing demand for green ships due to international maritime organization policies [3][4]. Profit Forecast and Valuation - The company’s net profit forecasts for 2025-2027 have been raised to 218 million yuan, 288 million yuan, and 334 million yuan, reflecting increases of 15%, 16%, and 17% respectively [5]. - The target price has been adjusted to 8.21 yuan, based on a projected PE ratio of 65 times for 2025, indicating confidence in the company’s ability to leverage its order backlog and operational efficiencies [5].

Investment Rating - The report maintains an "Overweight" rating for the company [7]. Core Views - The company reported a significant increase in revenue and net profit for H1 2025, with revenue reaching 1.843 billion RMB, up 22.00% year-on-year, and net profit of 126 million RMB, up 106.69% year-on-year [1][2]. - The rapid growth in performance is attributed to accelerated order deliveries in Q2, a surge in revenue from the shipbuilding EPC business, and an improvement in gross margins [1][3]. - The company has a robust order backlog, particularly benefiting from government support for deep-sea technology policies, positioning it well for future growth [1][4]. Summary by Sections Financial Performance - In H1 2025, the company's gross margin was 19.67%, an increase of 2.80 percentage points year-on-year, and the net profit margin was 6.85%, up 2.59 percentage points year-on-year [2]. - The total expense ratio for H1 2025 was 11.17%, a year-on-year increase of 0.55 percentage points, with sales expenses rising due to rapid growth in overseas business [2]. Operational Highlights - The company delivered 14 vessels under its design and construction contracts in H1 2025, compared to 12 vessels in H1 2024, indicating an acceleration in delivery speed [3]. - The revenue from the shipbuilding EPC business reached 1.697 billion RMB, reflecting a year-on-year increase of 32.33% [3]. Order Backlog and Future Prospects - As of the end of H1 2025, the company had a substantial order backlog, including 1.314 billion RMB in design contracts and 14.143 billion RMB in construction contracts, showing a 1.3% increase compared to the end of 2024 [4]. - The report highlights an increase in the proportion of offshore engineering orders, which is expected to benefit from the growing emphasis on deep-sea development and resource utilization [4]. Profit Forecast and Valuation - The profit forecast for the company has been revised upwards for 2025-2027, with expected net profits of 218 million RMB, 288 million RMB, and 334 million RMB respectively, reflecting increases of 15%, 16%, and 17% [5]. - The target price is set at 8.21 RMB, based on a PE ratio of 65 times for 2025, indicating a favorable valuation compared to the industry average [5].