Core Viewpoint - The company, Aerospace Nanhu, indicated that its military trade products are primarily sold through overall units and military trade companies, with the final customers being overseas clients [1] Group 1 - The company engages in military trade, highlighting its focus on international markets [1] - Sales of military products are conducted through specific units and trade companies, emphasizing a structured sales approach [1]

Core Viewpoint - The company has completed its military trade orders for 2025 and is actively engaging in subsequent orders, aiming to enhance performance in the fourth quarter [1] Group 1 - The company has confirmed that its military trade business volume has not significantly increased recently [1] - The company is intensifying production arrangements in the fourth quarter to ensure timely delivery and improve performance [1] - The company is focused on providing better returns to shareholders through its operational efforts [1]

Financial Performance - The company achieved a revenue of 9.15 billion CNY in the first half of 2025, representing a year-on-year growth of 63.83% [2] - The net profit attributable to shareholders was 504 million CNY, an increase of 22.05% compared to the same period last year [2] - Cash flow from operating activities was -226 million CNY, down from 103 million CNY in the previous year [2] Business Segments Mining Services - The mining services segment generated a revenue of 6.44 billion CNY, up 48.74% from 4.33 billion CNY in the previous year [2] - The segment's gross margin was 16.47%, a decrease of 1.86 percentage points year-on-year [4] - The company has over 35 billion CNY in backlog orders for mining services [4] - Revenue from overseas mining services reached 718 million CNY, an 18.87% increase from 604 million CNY [5][6] Explosives - The explosives segment reported a revenue of 1.38 billion CNY, a 40.31% increase from 985 million CNY [2] - The company has an industrial explosives capacity of 725,500 tons, ranking among the top in the country [3] Defense Equipment - The defense equipment segment generated revenue of 80.46 million CNY, a decline of 39.55% year-on-year [3] - The company is actively pursuing mergers and acquisitions in the defense sector to enhance its capabilities [8][9] Strategic Initiatives - The company is committed to international expansion, with significant investments in overseas resources, including funding and personnel [6] - It has increased its stake in Guangdong Provincial Military Industry Group to 65% [3] - The company is focusing on high-end intelligent weapon systems and related supply chain development [8][9]

Group 1: Company Strategy and Production Capacity - The company plans to continuously increase the number of presses while optimizing the structure based on market demand and national equipment renewal policies [1] - Current capacity utilization rate is at 100%, with flexible production capabilities for various products including industrial diamonds and synthetic diamonds [1] Group 2: Industry Challenges and Innovations - The fundamental solution to industry "involution" is through technological innovation and developing new production methods [2] - The company is enhancing core competitiveness by increasing R&D investment, collaborating with industry partners, and upgrading equipment [2] Group 3: Future Goals and Deliverables - The primary goal during the 14th Five-Year Plan is to ensure supply, with annual contracts signed based on actual orders [2] - The company anticipates steady growth in deliveries during the 14th Five-Year Plan, with revenue from contracts signed in the current year expected to materialize in the second half [2] Group 4: Military Trade and Equipment Capacity - Military trade operations are conducted by third-party companies, influenced by international situations and customer needs [2] - Current capacity utilization for special equipment is relatively full, with plans to increase capacity in the future [2]

Group 1: Financing and Incentives - The company is closely monitoring capital market dynamics and plans to strategize refinancing and equity incentive plans to support high-quality development [2] - A long-term incentive mechanism will be established, utilizing stock incentives and employee stock ownership plans to align the interests of management and employees with the company's long-term goals [2] Group 2: Profitability and Cost Management - The company has maintained stable operating performance and aims to improve profit margins through quality enhancement and cost reduction initiatives [2] - Key strategies include lowering management and operational costs, enhancing source and process control, and establishing a cost control indicator system for major business segments [3] Group 3: Military Trade and Growth Potential - The company has over 40 years of experience in military trade, with significant achievements and multiple flagship products exported to various countries [3] - Military trade remains a crucial area for the company's growth, with plans to expand efforts in response to international environmental changes [3] Group 4: Shareholder Returns and Governance - The company prioritizes shareholder returns, committing to distribute at least 30% of the annual net profit attributable to the parent company as cash dividends, exceeding regulatory requirements [3] - Future focus will be on balancing performance growth with shareholder returns, ensuring a long-term, stable, and sustainable return mechanism [3]