Investment Rating - The report maintains a rating of "Accumulate" for the company, indicating an expected relative performance increase of 5% to 15% over the next 6 to 12 months [7]. Core Views - The company's performance is under short-term pressure, but operational quality continues to improve, with opportunities for growth driven by deep collaboration with China Mobile and the AI wave [3][4]. - The company achieved a revenue of 1.133 billion yuan in H1 2025, a year-on-year decrease of 28.03%, while the net profit attributable to shareholders was -93 million yuan, a year-on-year increase of 48.78% [4][5]. - The overall gross margin improved to 59.91% in H1 2025, up 3.4 percentage points year-on-year, driven by a higher proportion of high-margin products [5]. Financial Performance Summary - Revenue Forecast: The company is projected to generate revenues of 3.315 billion yuan in 2024, 3.413 billion yuan in 2025, and 4.074 billion yuan in 2027, with a growth rate of -26% in 2024 and a recovery to 13% by 2027 [3][6]. - Net Profit Forecast: The net profit attributable to shareholders is expected to be -226 million yuan in 2024, 81 million yuan in 2025, and 274 million yuan in 2027, reflecting a significant recovery [3][6]. - Earnings Per Share (EPS): The EPS is forecasted to be -0.19 yuan in 2024, 0.07 yuan in 2025, and 0.23 yuan in 2027 [6]. Market Position and Strategy - The company is a leading player in the cybersecurity sector, leveraging resources from China Mobile to expand its presence in government and enterprise security scenarios [5]. - The company has maintained the number one market share in 19 product categories, including data security and industrial internet security, while other products rank among the top in the market [5]. - The collaboration with China Mobile focuses on enhancing personal and family security markets, with innovative products like "Dedicated Line Guardian" to meet digital transformation security needs [5].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 22.99 [7][8]. Core Insights - The company reported a revenue of RMB 1.133 billion for the first half of 2025, a year-on-year decline of 28.03%, but the net profit attributable to shareholders improved, with a loss of RMB 0.93 billion, narrowing by 48.78% [1]. - The company is focusing on innovation and new business growth driven by digitalization, while also enhancing operational efficiency, leading to improved gross margins and accounts receivable management [1][2]. - The partnership with China Mobile has led to the launch of new security products, significantly increasing revenue from business customers by over 50% [3]. Summary by Sections Financial Performance - In H1 2025, the company's gross margin was 59.91%, up 3.39 percentage points year-on-year, attributed to improved operational efficiency and a higher proportion of high-margin products [2]. - The operating cash flow turned positive in Q2 2025, showing significant improvement from a negative cash flow of RMB 1.62 billion in H1 2025 compared to RMB -5.19 billion in the same period of 2024 [2]. Business Development - The company is enhancing its "AI + Security" business layout, focusing on key industry customer needs and deploying advanced security models in critical sectors such as energy, healthcare, and public safety [4]. - The company has established a comprehensive ecosystem with China Mobile, integrating cloud, network, data, and endpoint solutions to expand into personal and family security markets [3]. Profit Forecast and Valuation - The revenue projections for 2025-2027 are RMB 3.714 billion, RMB 4.164 billion, and RMB 4.670 billion, respectively, with a target price based on a 7.5x PS ratio [5].

Core Viewpoint - The company reported a revenue of 1.133 billion yuan for the first half of 2025, with a net profit growth of 48.78% year-on-year, indicating strong financial performance and effective cash flow management [1]. Group 1: Financial Performance - The company achieved a revenue of 1.133 billion yuan in the first half of 2025 [1]. - The net profit attributable to shareholders increased by 48.78% compared to the same period last year [1]. - The comprehensive gross profit margin improved by 3.4 percentage points year-on-year [1]. - The second quarter saw a strong cash inflow, addressing seasonal cash flow fluctuations [1]. Group 2: Strategic Collaboration with China Mobile - The company is a dedicated subsidiary of China Mobile, focusing on cybersecurity and supporting the national security strategy [1]. - It is actively involved in the "BASIC6" innovation plan of China Mobile, enhancing the integration of cloud and cybersecurity capabilities [1]. - The company collaborates with China Mobile to explore a customer market space exceeding 1 billion users, leveraging China Mobile's extensive user base [4]. Group 3: Technological Advancements - The company is utilizing AI and cloud computing resources from China Mobile to enhance its security solutions, including the development of the Taihe security model [2]. - It has established a comprehensive cloud security framework that improves the efficiency of intelligent computing infrastructure [2]. - The company has released a white paper on low-altitude economic data security, supporting high-quality development in this sector [3]. Group 4: Market Expansion - The company is expanding its personal and family security market offerings, achieving significant revenue and user engagement with its security cloud solutions [4]. - It has tailored security products for enterprise digital transformation needs, addressing network security challenges for businesses [4]. - The company aims to deepen its strategic collaboration with China Mobile to enhance its market presence in consumer-grade security products [4][5].