Core Viewpoint - The company reported a solid performance in the first half of 2025, with revenue and net profit showing significant year-on-year growth, driven by the expansion in the new energy vehicle thermal management and digital energy sectors [2][3][4]. Revenue Performance - In the first half of 2025, the company achieved revenue of 7.17 billion yuan, representing a year-on-year increase of 16.5%. The second quarter of 2025 saw revenue of 3.75 billion yuan, up 17.9% year-on-year and 9.8% quarter-on-quarter [2][3]. - The growth in revenue is primarily attributed to the release of orders in the new energy vehicle thermal management and digital energy businesses [3]. Profitability Analysis - The gross profit margin for Q2 2025 was 18.8%, a decrease of 2.1 percentage points year-on-year and 1.0 percentage point quarter-on-quarter. The net profit for Q2 2025 was 2.3 billion yuan, reflecting a year-on-year growth of 8.3% and a quarter-on-quarter increase of 7.8% [3]. - The increase in net profit is linked to the steady growth in revenue from the new energy vehicle thermal management and digital energy sectors, alongside enhanced economies of scale [3]. Cost Structure - The company’s expense ratios for sales, management, R&D, and financial costs in Q2 2025 were 1.8%, 4.9%, 3.7%, and 0.0%, respectively, showing a year-on-year decrease across all categories due to cost reduction and efficiency improvements [3]. Global Strategy and Performance - The company has implemented a global business model, enhancing its supply chain in North America, Europe, and Southeast Asia, which has improved its ability to manage uncertainties. In H1 2025, North America generated revenue of 790 million yuan, achieving a net profit of 30 million yuan with a net profit margin of 4.4% [4]. - The European segment, particularly a new factory in Poland, has also turned profitable [4]. Digital Energy Business Growth - The digital energy division, established in 2021, focuses on various sectors including data centers and energy storage. In 2024, the division secured new annual orders worth 950 million yuan, with H1 2025 adding 640 million yuan in new orders, indicating a strong upward trend [5]. Intelligent Business Development - The company is advancing its embodied intelligence business, developing a comprehensive product system that includes various modules. Significant progress has been made in product development, with collaborations established with several universities to enhance its competitive edge [6]. Future Outlook - The company is expected to continue expanding in the new energy vehicle thermal management sector and enhance its global footprint. Revenue projections for 2025-2027 are 15.61 billion, 18.47 billion, and 21.76 billion yuan, with net profits of 1.04 billion, 1.32 billion, and 1.63 billion yuan, respectively [7].

Investment Rating - The report maintains a "Recommended" rating for the company [6]. Core Views - The company's H1 2025 performance met expectations, with revenue of 7.17 billion yuan, a year-on-year increase of 16.5%, and a net profit of 440 million yuan, up 9.5% year-on-year [1][2]. - The growth in revenue is primarily driven by the release of orders in the new energy vehicle thermal management and digital energy sectors [2]. - The company has successfully upgraded its overseas strategy, achieving a 50.5% year-on-year increase in North American business revenue and turning profitable [3]. - The digital energy business is expected to see significant growth, with new annual orders of 950 million yuan in 2024 and 640 million yuan in H1 2025 [3]. - The embodied intelligence business is accelerating, with a diverse product lineup and strategic collaborations with universities [3]. Summary by Sections Financial Performance - In Q2 2025, the company achieved revenue of 3.75 billion yuan, a year-on-year increase of 17.9% and a quarter-on-quarter increase of 9.8% [1][2]. - The gross margin for Q2 2025 was 18.8%, down 2.1 percentage points year-on-year, primarily due to product price declines and tariff impacts [2]. - The company’s expense ratios for sales, management, R&D, and financial costs were 1.8%, 4.9%, 3.7%, and 0.0%, respectively, showing a continuous optimization of the expense structure [2]. Strategic Developments - The company has implemented a global business model, enhancing its supply chain in North America, Europe, and Southeast Asia, which has improved its ability to respond to uncertainties [3]. - The digital energy division, established in 2021, focuses on multiple systems and modules in data centers, energy storage, and low-altitude vehicles, with significant order growth expected [3]. Future Projections - Revenue projections for 2025-2027 are 15.61 billion yuan, 18.47 billion yuan, and 21.76 billion yuan, respectively, with net profits of 1.04 billion yuan, 1.32 billion yuan, and 1.63 billion yuan [5]. - The expected earnings per share (EPS) for 2025-2027 are 1.25 yuan, 1.58 yuan, and 1.95 yuan, respectively, with corresponding price-to-earnings (PE) ratios of 30, 24, and 19 [5].

Core Viewpoint - Shenzhen Daotong Technology Co., Ltd. is a leading enterprise in the global automotive aftermarket diagnostic and testing field, with a stable market position and strong technological advantages, benefiting from rapid growth in its digital energy business and a solid customer base [2][5][20]. Financial Performance - The company's total assets reached 67.91 billion yuan in 2025, with a significant increase from 63.08 billion yuan in 2024 and 55.77 billion yuan in 2023 [2][19]. - The net profit for 2024 was 5.60 billion yuan, up from 1.40 billion yuan in 2023, indicating a strong growth trajectory [2][19]. - Operating revenue for 2024 was 39.32 billion yuan, reflecting a year-on-year increase of 20.95% [2][19]. Business Operations - The company maintains a high level of research and development investment, with a 14.07% increase in R&D spending in 2024, amounting to 6.80 billion yuan, which represents 17.29% of total revenue [12][13][20]. - The automotive diagnostic products accounted for 32.62% of total revenue, with a gross margin of 54.42% [12]. - The digital energy business saw a revenue increase of 52.98% in 2024, highlighting its growth potential [11][20]. Market Environment - The global automotive aftermarket diagnostic and testing industry is expected to grow steadily, driven by increasing vehicle ownership and the rising average age of vehicles [8][9]. - The demand for electric vehicle charging infrastructure is projected to expand significantly, with the U.S. public charging stations expected to grow from 180,000 in 2023 to 1.7 million by 2035 [10][11]. - The company benefits from a stable supply chain and has established strong relationships with major customers in North America and Europe, with 97.55% of its revenue coming from overseas markets in 2024 [16][18]. Competitive Position - The company is recognized for its technological innovation and has a strong global marketing network, covering over 120 countries [4][5]. - The automotive diagnostic and testing industry has high technical barriers, and the company is positioned to enhance its market share through continuous R&D and product innovation [10][20]. - The competitive landscape includes major players like Bosch and Snap-on, with the company aiming to improve its market influence and brand recognition [10][20].