Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company achieved significant growth in H1 2025, with revenue of 1.884 billion RMB (up 36.39% YoY) and net profit of 243 million RMB (up 56.79% YoY) [1][2] - The strong performance in Q2 2025 was driven by high demand in downstream sectors, particularly in wind and energy storage, alongside effective cost control that improved overall gross margins [1][3] - The company is focusing on core technology platforms and diversifying application scenarios, which is expected to enhance its market position [1] Financial Performance - In Q2 2025, the company reported revenue of 1.111 billion RMB (up 33.33% YoY, up 43.60% QoQ) and a net profit of 137 million RMB (up 38.11% YoY, up 30.34% QoQ) [1][2] - The gross margin for Q2 2025 was 35.44%, an increase of 0.45 percentage points YoY, while the net margin was 12.68%, a slight decrease of 0.50 percentage points YoY due to increased credit impairment losses [2] - The company’s H1 2025 revenue from the new energy control business was 1.524 billion RMB (up 44.97% YoY), while the engineering transmission business revenue was 226 million RMB (up 11.50% YoY) [3] Business Segments - The new energy control business experienced robust growth, benefiting from strong demand in offshore wind and energy storage, although its gross margin decreased due to intensified market competition [3] - The engineering transmission business saw an increase in gross margin to 47.71% (up 8.26 percentage points YoY), attributed to the acceleration of domestic substitution and higher-value projects [3] Product Development and Market Expansion - The company is actively promoting large-capacity power supply and power quality products, with significant growth potential in data centers [4] - The overseas revenue for H1 2025 reached 148 million RMB (up 54.46% YoY), accounting for 7.83% of total revenue, indicating strong growth momentum in international markets [4] Profit Forecast and Valuation - The company’s projected net profits for 2025-2027 are 642 million RMB, 750 million RMB, and 830 million RMB, respectively, with corresponding EPS of 1.41, 1.65, and 1.83 RMB [5] - The report assigns a target price of 48.05 RMB for 2025, based on a PE ratio of 34 times, reflecting confidence in the company’s growth across its various business segments [5]