Core Viewpoint - The report from CITIC Securities highlights the resilience of Hengsheng Electronics' profit performance, with stock incentives anchoring long-term growth [1] Revenue and Profit Performance - In the first half of 2025, the company experienced a slight decline in revenue due to overall pressure on financial IT, while benefiting from a significant year-on-year increase in non-recurring profits, showcasing impressive growth [1] Product Development - Core products such as UF3.0 and O45 are making positive progress; the core product Hengyun has assisted Hong Kong clients in upgrading their core transaction settlement systems, presenting opportunities for innovative business development [1] Market Position and Future Outlook - As a leader in the capital IT market, the company is expected to benefit significantly from the accelerated advancement of financial innovation and digital finance [1] Investment Rating - The company has been given a "Buy" rating [1]

Core Viewpoint - The report from CITIC Securities highlights the resilience of Hengsheng Electronics' profit performance, with stock incentives anchoring long-term growth [1] Revenue and Profit Performance - In the first half of 2025, the company experienced a slight decline in revenue due to overall pressure on the financial IT sector, while profit benefited from a significant year-on-year increase in non-recurring profits, showcasing impressive growth [1] Product Development - Core products such as UF3.0 and O45 are making positive progress; Hengyun's core products are assisting Hong Kong clients in upgrading their core transaction settlement systems, presenting new business development opportunities [1] Market Position and Future Outlook - As a leader in the capital IT market, the company is expected to be a key beneficiary of the accelerated advancement of financial innovation and digital finance [1] Investment Rating - The company is given a "Buy" rating [1]

Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook for its stock performance relative to the benchmark index [3][6]. Core Insights - The company reported a significant recovery in profits, with a net profit of 2.61 billion yuan in H1 2025, a year-on-year increase of 771.57%, despite a revenue decline of 14.44% to 24.26 billion yuan [1]. - The second quarter of 2025 saw a notable profit rebound, with a net profit of 2.29 billion yuan, up 247.07% year-on-year, while revenue decreased by 15.03% [1]. - The company is strategically optimizing its business structure by reducing non-core operations, which has contributed to its strong cost control, with sales, management, and R&D expenses decreasing by 26%, 21%, and 11% respectively [1]. - The company is experiencing steady development in its cornerstone business, particularly in the Hong Kong region, where new opportunities are emerging [2]. - The launch of employee stock ownership and stock option plans reflects the company's confidence in its future performance, with specific profit growth targets set for the coming years [3]. Financial Projections - The company is projected to achieve net profits of 1.2 billion yuan, 1.34 billion yuan, and 1.61 billion yuan for the years 2025, 2026, and 2027 respectively, with corresponding PE ratios of 62, 55, and 46 [3][5]. - Revenue is expected to decline by 8.1% in 2025, followed by growth of 12.8% in 2026 and 13.6% in 2027 [5][10]. - The report highlights a projected increase in earnings per share from 0.63 yuan in 2025 to 0.85 yuan in 2027 [5][10].