Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The company reported a revenue of 3.83 billion yuan in the first half of 2025, a year-on-year decrease of 9.92%. The net profit attributable to the parent company was 354 million yuan, down 31.46% year-on-year. The adjusted net profit was 289 million yuan, a decline of 38.86% year-on-year. In Q2 alone, revenue was 2.22 billion yuan, down 11.56% year-on-year, with a net profit of 234 million yuan, down 36.96% year-on-year [2][6] - Despite pressure on traditional business, the company's "ALL IN AI" strategy is gradually gaining traction, with industrial AI product revenue reaching 117 million yuan and robot product revenue at 110 million yuan in the first half of 2025. The long-term outlook for the company's strategic transformation remains positive [2][6] Summary by Sections Revenue Performance - The overall revenue growth remains under pressure, with a decline of 10% in H1 2025 and 12% in Q2 2025. This is attributed to significant pressure on downstream demand and a negative PPI environment. The company is adjusting its business model, with expectations for demand growth from new projects in Xinjiang's coal chemical industry [12] - Revenue breakdown shows that industrial automation and intelligent manufacturing solutions generated 2.24 billion yuan, while automation instruments and industrial software saw declines of 9.49% and 19.49% respectively. However, the S2B platform revenue dropped significantly by 52.80% [12] Profitability Analysis - The company's gross margin was approximately 32.1% in H1 2025, a decrease of 1.15 percentage points year-on-year. The decline is mainly due to business restructuring. The gross margins for various products varied, with industrial software benefiting from AI promotion [12] - A significant factor in profit decline was asset impairment and credit impairment losses totaling 112 million yuan, which impacted overall profitability [12] Business Development - The AI and robotics sectors are progressing well, with the TPT model entering a phase of scale application, generating 117 million yuan in revenue. The company has successfully implemented over 110 projects across various industries [12] - The subscription model for industrial software has seen 938 clients signed up by H1 2025, indicating a shift towards new business models [12] Investment Recommendations - The company is expected to achieve net profits of 1.16 billion yuan, 1.38 billion yuan, and 1.65 billion yuan for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 33.7x, 28.2x, and 23.6x. Investors are advised to pay close attention to the company's developments [12]

Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, but new business segments like industrial AI and robotics are showing rapid growth, which is helping to offset some of the pressures from traditional business areas [1][2]. Financial Performance - In the first half of 2025, the company achieved revenue of 3.83 billion yuan, a year-on-year decrease of 9.92% - The net profit attributable to shareholders was 354 million yuan, down 31.46% year-on-year - The non-recurring net profit was 289 million yuan, a decline of 38.86% year-on-year [1] Quarterly Analysis - In Q2 2025, the company reported revenue of 2.22 billion yuan, a year-on-year decrease of 11.56% - The net profit attributable to shareholders for Q2 was 234 million yuan, down 36.96% year-on-year - The decline in revenue and profit is attributed to industry competition, reduced bank wealth management and interest income, and increased foreign exchange losses [2] Business Segments - The company maintains a strong position in traditional business areas, with a 40.4% market share in distributed control systems (DCS) and a 31.2% market share in safety instrumented systems (SIS) in 2024 - Despite some slowdown in downstream investments, structural growth was observed in sectors like energy, building materials, and papermaking, with revenue growth of 82.58% in building materials and 77.56% in papermaking [3] International Expansion - The company has made significant strides in international markets, signing a pipeline project contract with Algeria's national oil and gas company, marking its entry into the top twenty global oil companies not funded by China - As of June 2025, the company has opened 200 global 5S stores, enhancing its global marketing service system [3] Strategic Initiatives - The company is implementing the "1+2+N" strategic framework, focusing on AI-driven intelligent operations - A new industrial agent generation platform (TPT 2) was launched, utilizing a mixed expert model (MoE) to reshape industrial software architecture and application models - The company is promoting a subscription-based revenue model, having signed contracts with 938 subscription clients by June 2025 [4] Investment Outlook - The company is positioned as a leader in process industrial automation, with promising growth in industrial AI and robotics, as well as new opportunities in international markets - Revenue forecasts for 2025-2027 are adjusted to 9.32 billion, 10.58 billion, and 12.06 billion yuan, with corresponding growth rates of 2.0%, 13.5%, and 14.1% - Net profit forecasts are revised to 1.14 billion, 1.27 billion, and 1.45 billion yuan, with growth rates of 1.9%, 11.8%, and 13.8% respectively [5]

Investment Rating - The report maintains a "Strong Buy" rating for the company, expecting it to outperform the benchmark index by over 20% in the next six months [2][8]. Core Views - The company reported a revenue of 3.83 billion yuan for the first half of 2025, a year-on-year decrease of 9.92%, and a net profit attributable to shareholders of 354 million yuan, down 31.46% year-on-year. The decline in revenue and profit is attributed to industry competition, reduced bank wealth management and interest income, and increased foreign exchange losses [2][3]. - Despite short-term performance pressure, the company is focusing on industrial AI and robotics, which are becoming the core growth engines, partially offsetting the short-term pressures from traditional businesses. The industrial AI product TPT generated revenue of 117 million yuan, while the robotics segment brought in 110 million yuan, with new orders totaling 200 million yuan [3][8]. - The company maintains a leading position in traditional business, with a domestic market share of 40.4% in distributed control systems (DCS) and 31.2% in safety instrumented systems (SIS). The company has also made significant strides in overseas market expansion, including a contract with Algeria's national oil and gas company [3][8]. - The "1+2+N" strategic framework is being implemented, with industrial robots achieving large-scale deployment. The company has launched the world's first time-sequence hybrid expert model-driven industrial agent generation platform (TPT 2) and has signed 938 subscription-based clients, marking a strategic breakthrough in its business model [3][8]. - The company expects revenue growth of 2.0%, 13.5%, and 14.1% for 2025, 2026, and 2027, respectively, with net profit attributable to shareholders projected at 1.139 billion yuan, 1.274 billion yuan, and 1.450 billion yuan for the same years. The target price is set at 57.96 yuan, based on a 36x PE ratio for 2026 [3][8]. Financial Summary - For 2025, the company anticipates total revenue of 9.319 billion yuan, with a year-on-year growth rate of 2.0%. The net profit attributable to shareholders is expected to be 1.139 billion yuan, reflecting a growth rate of 1.9% [4][9]. - The company's total market capitalization is approximately 38.15 billion yuan, with a circulating market value of 37.77 billion yuan. The asset-liability ratio stands at 42.31% [5][9].

Core Viewpoint - Zhongkong Technology Co., Ltd. is accelerating the development of emerging businesses such as industrial AI and robotics, which are expected to become the main growth drivers for the company in the future [1][2]. Financial Performance - In the first half of 2025, the company achieved operating revenue of 3.83 billion yuan and a net profit attributable to shareholders of 354 million yuan [1]. Industrial AI Development - The company is advancing its "AllinAI" strategy, integrating and upgrading industrial AI technologies, and has made significant progress in the development and application of the TPT time-series model, which has been deployed in over 110 real production scenarios [2]. - The launch of TPT2, a global first industrial agent generation platform based on a time-series hybrid expert model, marks a significant upgrade from the previous TPT, enhancing the efficiency of intelligent application development [2]. Robotics Business - The company is focusing on the "AI + platform + hazardous source inspection and operation, supply chain logistics, humanoid robot equipment" strategy to promote the large-scale application of process industrial robot solutions [2]. - The new generation intelligent inspection robot ARAMCOBOTGEN2, developed in collaboration with Saudi Aramco, has entered the deployment phase, and the industry’s first flying shuttle robot has been successfully delivered to Sinopec [3]. International Expansion - The company is actively pursuing a global strategy, achieving positive results in Southeast Asia, the Middle East, Africa, Central Asia, Latin America, and North America, including landmark projects with major industry players [4]. - The company has entered the supplier lists of significant enterprises such as PEMEX and CEMEX, and has reached key milestones with leading companies like Petrobras and Suzano [4]. Competitive Advantage - With over 30 years of technical accumulation in the process industry, the company has established strong data resources and industry insights, creating significant competitive barriers [4]. - The company's distributed control system (DCS) has maintained the number one market share in China for fourteen consecutive years, serving over 37,000 customers and deploying more than 100,000 control systems, accumulating approximately 100EB of industry data resources [4].

Core Insights - The company reported a total operating revenue of 3.83 billion yuan, representing a year-on-year decrease of 9.92% [1] - The net profit attributable to shareholders was 354.08 million yuan, down 31.46% compared to the previous year [1] - The company is focusing on advancing new businesses with high prospects and potential, specifically in industrial AI and robotics [1] Financial Performance - Total operating revenue for the reporting period was 3.83 billion yuan, a decline of 9.92% year-on-year [1] - Net profit attributable to shareholders was 354.08 million yuan, reflecting a decrease of 31.46% year-on-year [1] Business Development - The company is prioritizing the development of industrial AI and robotics, which are seen as high-potential areas [1] - Revenue from industrial AI products (TPT business) was 116.62 million yuan [1] - Revenue from robotics products was 110.15 million yuan [1]