Core Viewpoint - The company released its 2025 semi-annual report, achieving operating revenue of 732 million yuan in H1 2025, a year-on-year increase of 0.40%, while the net profit attributable to shareholders was 106 million yuan, a year-on-year decrease of 13.12%, significantly impacted by high R&D expenses [1][2] Financial Performance - In H1 2025, the company reported operating revenue of 732 million yuan, a slight increase of 0.40% year-on-year, and a net profit attributable to shareholders of 106 million yuan, down 13.12% year-on-year; the non-recurring net profit was 100 million yuan, down 11.37% year-on-year [2][3] - The subsidiary performance varied, with Changgao Electric experiencing a 16.34% decline in revenue due to delayed project progress, while Changgao Complete saw a revenue increase of 58.87% and net profit growth of 63.32% due to increased product deliveries [3] Industry Outlook - The power equipment industry is experiencing high demand, with national grid investments expected to exceed 650 billion yuan in 2025, and Southern Power Grid planning fixed asset investments of 175 billion yuan, setting new historical highs [1][4] - The demand for UHV construction remains strong, driven by external delivery from the Shagao Desert Base and the need for hydropower delivery from Southwest China [1][4] - The company holds a leading market position in products such as combination electrical devices and isolating switches, actively expanding into high-voltage products to capture industry growth opportunities [1][4][5] Product Development - The company is a major player in high-voltage isolating switches and is expanding its GIS product offerings across various voltage levels, achieving successful bids for 500kV combination electrical devices [5] - The company is investing 96 million yuan to establish a GIL assembly plant, enhancing its capabilities for R&D and production of GIL products in the 220-1000kV voltage range [5] Future Earnings Forecast - The company is projected to achieve net profits attributable to shareholders of 326 million yuan and 407 million yuan for 2025 and 2026, respectively, with price-to-earnings ratios of 14.1x and 11.3x [7]

Group 1: Financial Performance - In 2024, the company achieved revenue of 1.76 billion CNY, a year-on-year increase of 17.86% [3] - The net profit attributable to the parent company for 2024 was 252 million CNY, up 45.66% year-on-year [3] - In Q1 2025, the company reported revenue of 339 million CNY, a growth of 33.57% compared to the same period last year [3] Group 2: R&D and Product Development - The company invested 94 million CNY in R&D in 2024, accounting for 5.34% of total revenue, marking the highest investment in history [3] - New products, including 363kV and 800kV combination electrical devices, received full type test reports by the end of the reporting period [3] - In 2025, the company plans to focus on the R&D of 1000kV combination electrical products [3] Group 3: Operational Strategy - The company aims to fully initiate three major production base construction projects in 2025 [3] - The strategy includes focusing on core business and gradually exiting loss-making segments [3] - The company plans to enhance production capacity and efficiency at its three production bases [3] Group 4: Subsidiary Performance - Subsidiary Longgao Electric achieved revenue of 880 million CNY in 2024, with a net profit of 158 million CNY, reflecting a year-on-year revenue growth of 21.46% [3] - Longgao Switch reported revenue of 460 million CNY, with a net profit of 110 million CNY, marking a 30.37% increase in revenue [3] - The engineering and design segment generated over 90 million CNY in revenue, while Huawang Electric Power reported a loss of over 25 million CNY [3][4] Group 5: Market and Competitive Landscape - The company secured approximately 50 million CNY in high-voltage orders in 2024, contributing significantly to profits [4] - The competitive landscape in the power distribution market is expected to benefit from centralized procurement strategies by the State Grid [5] - Despite price reductions in bids, the overall tender volume growth may offset the impact on profits [5]