Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The semiconductor advanced process equipment is accelerating its delivery, and the display business is gradually recovering [3][8] - The company has a strong order backlog, with semiconductor equipment orders at approximately 1.82 billion RMB, showing a year-on-year increase of 3.2%, and display equipment orders at approximately 1.44 billion RMB, with a year-on-year increase of 38.7% [3] - The company is optimistic about the growth of its semiconductor business and the recovery of its display business, leading to maintained profit forecasts for 2025-2027 [3][8] Financial Summary - Total revenue for 2023 is projected at 2,429 million RMB, with a year-on-year decrease of 11.03%, but expected to grow to 3,356 million RMB in 2025, representing a year-on-year increase of 30.84% [1][9] - The net profit attributable to the parent company is expected to recover from a loss of 97.6 million RMB in 2024 to a profit of 219.7 million RMB in 2025, reflecting a significant year-on-year growth of 325.11% [1][9] - The company's earnings per share (EPS) is projected to improve from -0.35 RMB in 2024 to 0.79 RMB in 2025 [1][9] Operational Performance - In the first half of 2025, the company achieved a revenue of 1.381 billion RMB, a year-on-year increase of 23.2%, with the semiconductor detection business growing by 146.4% [3][8] - The gross margin for the first half of 2025 was 44.1%, with a slight year-on-year decrease of 1.0 percentage points, while the net margin improved by 3.5 percentage points to 7.4% [3][8] - The company reported a negative operating cash flow of 460 million RMB in the first half of 2025 [3]

Core Viewpoint - Nanhua Instrument has shown a strong recovery in its core business and is leveraging growth in the new energy sector, achieving significant improvements in operational performance despite a complex market environment [1][2][6] Group 1: Financial Performance - In 2024, the company reported revenue of 124 million yuan, a year-on-year increase of 10.79%, and a net profit attributable to shareholders of 14.77 million yuan, marking a turnaround from losses [1] - In Q1 2025, revenue grew by 44.18% year-on-year, while net profit showed a reduction in losses by 16.54%, indicating a strong start to the year [1] Group 2: Industry Trends - The Chinese motor vehicle inspection industry is in a continuous development phase, with the vehicle ownership reaching 453 million and new energy vehicles surpassing 31.4 million [2] - The market is transitioning from traditional inspection services to intelligent and multi-scenario testing, creating structural opportunities driven by policy and market demand [2] Group 3: Business Growth Drivers - The company experienced a 41.34% increase in sales volume of motor vehicle inspection equipment and a 46.88% rise in production volume, reflecting a rapid recovery in its core business [2] - New energy vehicle safety inspection has emerged as a new growth point, with the implementation of regulations in March 2025, leading to increased sales in related products [2] Group 4: Internal Growth and Innovation - Nanhua Instrument is enhancing internal growth by optimizing product structure and expanding into digital solutions and vehicle networking software [4] - The company has made strategic acquisitions to boost its software and IoT capabilities, supporting smart vehicle inspections and data integration services [4] - R&D investment increased by 14.12% in 2024, focusing on advanced monitoring technologies and new projects, thereby expanding its technological capabilities [4] Group 5: Management and Financial Health - The company is actively pursuing cost reduction and efficiency improvements, achieving a sales expense increase in line with revenue growth [5] - As of Q1 2025, the asset-liability ratio was 10.7%, with a current ratio of nearly 6.75, indicating strong financial health [5] - The company has approximately 80 million yuan in hand orders, providing a stable foundation for business growth [5] Group 6: Future Outlook - With support from policies, industry recovery, and internal optimization, the company's operational quality and market expectations are improving [6]