Investment Rating - The investment rating for the company is "Buy" [5][10]. Core Views - The company's performance in the first half of 2025 met expectations, with revenue of 32.05 billion yuan, a year-on-year increase of 20.4%, and a net profit of 1.61 billion yuan, which remained stable compared to the previous year [2][5]. - The decline in quarterly profit growth is attributed to a high base from the same period in 2024 [2]. - The company is experiencing a rapid iteration of optical fiber and cable products, with an upcoming expansion in specialty fiber production [2][3]. - The demand in the deep-sea sector is strong, with a significant backlog of orders in marine energy projects [3]. Summary by Sections Financial Performance - In Q2 2025, the company achieved revenue of 18.78 billion yuan, a year-on-year increase of 26.6%, while net profit was 1.06 billion yuan, down 3.6% year-on-year [2]. - The company's expense ratio was 7.9%, a decrease of 2.1 percentage points year-on-year, primarily due to a reduction in R&D expenses [2]. - The gross margin was 13.6%, down 3 percentage points year-on-year, and the net margin was 5%, down 1 percentage point year-on-year [2]. Product Development - The company is accelerating the commercialization of high-end products such as ultra-low loss optical fibers and marine optical fibers, with the air-core fiber achieving an international advanced loss value of ≤0.2 dB/km [2]. - An AI advanced optical fiber expansion project is under construction, expected to be completed by February 2026, which will likely increase the proportion of specialty fibers in the company's product mix [2]. Market Position and Orders - The company has secured over 2.6 billion yuan in new marine energy projects in the first half of 2025, with a total backlog of orders in the energy interconnection sector amounting to approximately 20 billion yuan [3]. - The deep-sea sector is expected to see a production of over 600 marine cables by the end of 2025, with the company being one of the few domestic firms capable of cross-ocean cable engineering [3]. Profit Forecast and Valuation - The company is expected to see continued improvement in profitability, with projected net profits of 3.37 billion yuan, 3.90 billion yuan, and 4.52 billion yuan for 2025, 2026, and 2027, respectively [3]. - The corresponding price-to-earnings ratios are estimated to be 15, 13, and 11 times, indicating that the stock is still undervalued [3].