Core Viewpoint - The company reported strong financial performance in H1 2025, with significant growth in revenue and net profit, driven by various business segments, particularly in rail transportation and emerging equipment sectors [1][2]. Financial Performance - Revenue reached 12.21 billion RMB, a year-on-year increase of 17.9% - Net profit attributable to shareholders was 1.67 billion RMB, up 12.9% year-on-year - Non-recurring net profit stood at 1.59 billion RMB, reflecting a 37.0% year-on-year growth, accelerating from 29.5% in Q1 2025 [1]. Business Segment Analysis - Rail transportation business generated 6.91 billion RMB in revenue, a 12.6% increase year-on-year - Emerging equipment business achieved revenue of 5.24 billion RMB, growing by 25.9%, with foundational components revenue at 2.42 billion RMB (up 29.1%) and new energy generation revenue at 1.05 billion RMB (up 42.9%) - Revenue from electric drive for new energy vehicles was 1.00 billion RMB, a modest increase of 1.3% [1][2]. Profitability Metrics - The overall gross margin improved by 4.4 percentage points to 32.0% due to enhanced profitability across all business segments and changes in revenue structure - The company declared a dividend of 0.44 RMB per share (including tax), with a payout ratio of 35.75% [1]. Industry Outlook - The rail transit business is expected to continue its optimistic growth, with maintenance services accounting for approximately 23% of rail revenue, indicating strong future demand in both national rail and urban rail maintenance [2]. - The semiconductor sector is also on an upward trajectory, with the new factory's capacity ramping up, contributing to a 29.1% year-on-year increase in foundational components revenue [2]. Future Projections - The company is projected to achieve revenues of 27.4 billion RMB, 30.3 billion RMB, and 33.0 billion RMB for the years 2025-2027, with growth rates of 10.1%, 10.4%, and 9.0% respectively - Net profits are expected to be 4.27 billion RMB, 4.77 billion RMB, and 5.29 billion RMB for the same period, with growth rates of 15.4%, 11.7%, and 10.8% respectively [3]. Investment Rating - The company maintains a buy rating with a target price of 51.3 HKD, representing a potential upside of 31% from the current price, based on a 15x PE valuation for 2025 [3].