Core Viewpoint - The release of the "Encouragement Directory for Foreign Investment Industries (2025 Edition)" aims to attract and utilize foreign investment more effectively, focusing on advanced manufacturing, modern services, high-tech, and energy-saving sectors, particularly in the central and northeastern regions of China [3][6]. Summary by Sections Background of the Revision - The revision of the 2025 edition of the "Encouragement Directory" is part of the government's strategy to enhance foreign investment, as emphasized in various national policies and reports [6][7]. Changes in the Directory - The 2025 edition includes a total of 1,679 entries, an increase of 205 from the 2022 version, with 303 modifications. The national directory has 619 entries (100 new, 131 modified), while the regional directory has 1,060 entries (105 new, 172 modified) [7][8]. Key Changes in Encouraged Sectors - The updated directory continues to prioritize advanced manufacturing, adding new categories such as the development of nucleic acid drugs, zero-magnetic medical equipment, and underwater robots for deep-sea operations [8][9]. - There is a strong emphasis on modern service industries, with new entries for high-end shipping services, virtual power plant operations, and various consumer service sectors [8][9]. Regional Focus - The directory encourages foreign investment in the central and northeastern regions by adding specific entries tailored to local resources and industrial strengths, such as cruise tourism in Liaoning and ice and snow equipment manufacturing in Heilongjiang [9][10]. Benefits for Foreign Investment - Industries listed in the "Encouragement Directory" can enjoy several benefits, including tax exemptions on imported equipment, preferential land supply, reduced corporate income tax rates in certain regions, and tax credits for reinvested profits [10]. Implementation Considerations - The Ministry of Commerce plans to promote the 2025 edition through outreach and support measures, ensuring that foreign enterprises are well-informed and can fully benefit from the directory [11].

Investment Highlights - The company is rated as outperforming the industry with a target price of 130.00 yuan, based on a PE valuation method corresponding to 57 times P/E for 2026 [1] - The smart agriculture sector presents a vast market opportunity, with a projected market size of 105 billion yuan in 2024 and a CAGR of 15% from 2019 to 2024 [1] - The company holds a leading position in the smart agriculture industry, with a market share of 34% in soil moisture monitoring equipment and 46% in county-level plant protection stations [1] Core Competitiveness - The company possesses core technologies with a strong R&D team, allocating 26% of its workforce and 11% of its budget to R&D in 2024, contributing over 75% of revenue from seven core technologies [2] - It offers integrated product services, with over 50% of revenue in 2023 coming from the combination of software and hardware solutions [2] - The company has established strong industry resources, having served over 1,000 county-level agricultural authorities and completed large-scale smart agriculture projects worth 67.56 million yuan in 2023, with a five-year CAGR of 81% [2] Growth Drivers - The company raised 230 million yuan through its IPO to enhance R&D, platform upgrades, and manufacturing capabilities, focusing on agricultural AI and smart agricultural robots as new growth engines [3] - It is actively expanding into new markets outside East China and internationally, aiming for steady market share growth [3] - The company is transforming commercial and civilian technology achievements, targeting a paid subscription area of 250 million acres, with significant market expansion potential [3] Potential Catalysts - Accelerated implementation of smart agriculture policies [4] - Breakthroughs in innovative technologies [4] - Rising prices of agricultural products [4] Profit Forecast and Valuation - The company is expected to achieve EPS of 1.87 yuan and 2.3 yuan for 2025 and 2026, respectively, with a CAGR of 26% [5] - The current stock price corresponds to 61 times P/E for 2025 and 50 times P/E for 2026, with a target price of 130 yuan indicating a potential upside of 13% [5]