Summary of Haixing Electric's Conference Call Company Overview - **Company**: Haixing Electric - **Date**: August 19, 2025 Key Points Financial Performance - Revenue decreased by 14.67% year-on-year to 1.923 billion yuan, while net profit fell by 25.74% to 395 million yuan [2][3][18] - Domestic market revenue declined by approximately 20%, primarily due to slow contract fulfillment [2][11] - Overseas market revenue decreased by about 10%, affected by project delays in Bangladesh and Africa, although Europe and Latin America saw growth [2][11][16] Business Development - **Smart Distribution**: - Focus on global layout and localized operations, with a central research institute established to accelerate product development [2][4] - Employee count increased from 2,600 to 3,100, with an additional 200 hires by June 2025 [4][21] - **New Energy**: - Significant growth in the first half of 2025, driven by increased demand for overseas commercial photovoltaic projects and microgrid solutions [2][8] - Collaboration with domestic EV manufacturers to expand charging station business [2][8][32] Market Trends - The bidding model reform in the distribution network sector is favorable for Haixing Electric, with successful bids totaling 149 million yuan for integrated products [2][12] - New business developments include establishing smart water meter production lines in Brazil and South Africa, with overseas contracts exceeding 100 million yuan [2][6] Strategic Initiatives - Establishment of an 800 million yuan industrial fund with CICC to invest in new energy, energy algorithms, IoT technologies, and smart manufacturing [4][17] - Transitioning from traditional manufacturing to a system solution provider, focusing on green electricity and clean water sectors [4][25][26] Future Outlook - Anticipated gradual revenue increase in the second half of 2025 from new energy business, despite current pressures from slow order fulfillment [9][15] - Continued focus on expanding overseas markets, particularly in regions like Indonesia, which has significant renewable energy plans [10][15] Challenges and Risks - The company faces intensified competition both domestically and internationally, necessitating proactive investments and structural optimization [3][11] - Delays in project deliveries in key markets like Bangladesh and Africa could impact revenue recovery [11][14][35] Operational Insights - The company’s inventory management is healthy, with a focus on production based on confirmed orders [19][20] - Increased operational costs due to hiring more sales and R&D personnel, which may take time to translate into revenue growth [21][22] Competitive Advantages - Haixing Electric's competitive edge lies in its differentiated strategy, extensive global presence, and strong system solution capabilities [24][26] - The company aims to leverage emerging technologies and market trends, such as Web 3.0, to enhance its service offerings and operational efficiency [27][28] Conclusion - Haixing Electric is navigating a challenging market environment with strategic investments and a focus on innovation, positioning itself for future growth in both domestic and international markets [15][25]