Core Viewpoint - Zhongkong Technology (688777.SH) expects a significant decline in net profit for the year 2025, projecting a range of 426 million to 524 million yuan, representing a year-on-year decrease of 53.07% to 61.85% [1] Group 1: Financial Performance - The anticipated decline in 2025 net profit is primarily attributed to a slowdown in macroeconomic growth and weak downstream customer demand, leading to a decrease in the company's main business revenue compared to the previous year [1] - The company also faces reduced income from bank wealth management and interest, alongside increased foreign exchange losses compared to the previous year [1] Group 2: Business Development - The company is fully committed to developing its industrial AI business, with innovative projects such as the time series large model TPT gradually achieving scalable commercial implementation [1]

Core Viewpoint - The company expects a significant decline in net profit for the fiscal year 2025, projecting a range of 426 million to 524 million yuan, representing a year-on-year decrease of 53.07% to 61.85% [1] Group 1: Financial Performance - The anticipated decline in net profit is primarily attributed to a slowdown in macroeconomic growth and weak demand from downstream customers, leading to a decrease in main business revenue compared to the previous year [1] - The company also faces reduced income from bank wealth management and interest, alongside increased foreign exchange losses compared to the previous year [1] Group 2: Business Development - The company is fully committed to developing its industrial AI business, with innovative projects such as the time series large model TPT gradually achieving scalable commercial implementation [1]

Core Viewpoint - The company Zhongkong Technology (688777) expects a significant decline in net profit for the year 2025, projecting a decrease of 53.07% to 61.85% compared to the previous year [1] Financial Performance - The anticipated net profit for 2025 is estimated to be between 426 million yuan and 524 million yuan [1] - The decline in performance is attributed to a slowdown in macroeconomic growth and weak demand from downstream customers, leading to a decrease in main business revenue compared to the previous year [1] Revenue Sources - The company has reported a reduction in bank wealth management and interest income year-on-year, alongside an increase in foreign exchange losses [1] Strategic Focus - The company is fully committed to developing its industrial AI business, with innovative projects such as the time series large model TPT gradually achieving commercial scalability [1]

Core Viewpoint - The company, Zhongkong Technology, has actively engaged in share repurchase, indicating a commitment to enhancing shareholder value and supporting its innovative business goals in industrial AI [2] Group 1: Share Repurchase Details - As of November 30, 2025, the company has repurchased a total of 5.943706 million shares, which represents 0.7512% of its total share capital [2] - The highest repurchase price was RMB 51.49 per share, while the lowest was RMB 48.30 per share, with a total transaction amount of RMB 298.8809 million [2] Group 2: Future Plans - The company plans to continue share repurchases, considering various factors, and aims to utilize the repurchased shares for employee stock ownership plans and equity incentives [2] - This strategy is intended to motivate teams and individuals who contribute to technological innovation and rapid business breakthroughs, particularly in the development of the company's time series large model TPT and subscription-based industrial AI innovations [2]

Core Insights - The collaboration between the company and Huawei has deepened in recent years, leading to the development of comprehensive AI innovation solutions across multiple industries [2] Group 1: Partnership and Collaboration - In September, the company and Huawei jointly launched AI innovation solutions by integrating the company's industry knowledge and AI capabilities with Huawei's ICT infrastructure [2] - The partnership focuses on strategic alignment in areas such as multi-industry scenario innovation and the integration of AI large models with hardware [2] Group 2: Technological Integration - The company's "1+2+N" industrial AI-driven enterprise intelligence operation framework will utilize Huawei's Kunpeng servers and OceanStor storage for unified data connectivity, modeling, and analysis capabilities [2] - The company's self-developed time series large model TPT and hypergraph large model HGT will be trained and inferred on Huawei's Ascend AI computing platform to enable automation in production processes and enterprise operations [2] Group 3: Future Developments - The new generation of the company's Universal Control System (UCS) will be deeply integrated with Huawei's Kunpeng hardware, redefining the product form and application value of control systems through software definition and cloud-native technology [2] - The company plans to explore a new industrial service ecosystem by combining its offline PlantMate 5S store with the online PlantMart marketplace [2]

Core Viewpoint - The collaboration between Zhongkong Technology (688777.SH) and Huawei has deepened, focusing on creating comprehensive AI innovation solutions across multiple industries, leveraging both companies' strengths in industrial AI and ICT infrastructure [1] Group 1: Partnership Development - The partnership has led to the development of AI solutions that address industry pain points, integrating Zhongkong's industry knowledge and Huawei's technological capabilities [1] - In September, both companies jointly released AI innovation solutions that cover various industries and scenarios [1] Group 2: Technological Integration - Zhongkong's "1+2+N" industrial AI-driven architecture will utilize Huawei's Kunpeng servers and OceanStor storage to provide unified data integration, modeling, and analysis capabilities for physical devices and information systems [1] - The company's self-developed time series model TPT and hypergraph model HGT will be trained and inferred using Huawei's Ascend AI computing platform, enabling automation in production processes and enterprise operations [1] - The new generation of general control system UCS will be deeply integrated with Huawei's Kunpeng hardware, redefining the product form and application value of control systems through software definition and cloud-native technology [1] Group 3: Future Exploration - Both companies plan to explore a new industrial service ecosystem by combining Zhongkong's offline PlantMate 5S store and online PlantMart marketplace, aiming for a one-stop industrial service model [1]

Investment Rating - The report maintains a "Strong Buy" rating for the company [3][7]. Core Insights - The company is experiencing pressure in its traditional business, with revenue and profit declining in the first three quarters. However, innovative businesses such as robotics, industrial AI, and software subscription models are developing rapidly, with industrial AI starting to achieve scale and robotics revenue exceeding 100 million [1][7]. - The company is projected to have revenues of 90.92 billion, 99.35 billion, and 109.31 billion for the years 2025 to 2027, respectively, with net profits of 11.35 billion, 12.82 billion, and 14.44 billion [7]. Financial Data and Valuation - Total revenue for 2023 is expected to be 86.20 billion, with a year-on-year growth of 30%. However, a decline of 1% is anticipated for 2025 [2][14]. - Operating profit for 2023 is projected at 11.85 billion, with a year-on-year growth of 36% [2][14]. - Net profit attributable to shareholders is expected to be 11.02 billion in 2023, with a year-on-year growth of 38% [2][14]. - Earnings per share (EPS) is projected to be 1.39 yuan for 2023, with a PE ratio of 37.3 [2][14]. Business Performance - In the first three quarters of 2025, the company achieved a total revenue of 56.54 billion, a year-on-year decline of 10.78%, and a net profit of 4.32 billion, down 39.78% year-on-year [7]. - The gross margin for the first three quarters was 31.87%, a decrease of 0.98 percentage points year-on-year [7]. - The company is focusing on innovative business areas, with industrial AI revenue reaching 1.54 billion and robotics revenue at 1.22 billion in the first three quarters [7].

Core Viewpoint - The company plans to repurchase shares to enhance employee motivation and support its industrial AI development strategy, with a total repurchase amount ranging from RMB 50 million to RMB 100 million [2][14][42]. Group 1: Share Repurchase Plan - The repurchase amount will be no less than RMB 50 million and no more than RMB 100 million [2]. - The funding sources for the repurchase will include the company's own funds and funds raised beyond the initial offering [3][16]. - The shares will be used for employee stock ownership plans and/or equity incentives [4][10][19]. - The maximum repurchase price is set at RMB 68.81 per share, which is 150% of the average trading price over the previous 30 trading days [4][15]. - The repurchase will be conducted through centralized bidding [5][11]. - The repurchase period is set for 12 months from the board's approval date [6][12]. Group 2: Board Meeting and Approval - The board meeting to approve the repurchase plan was held on October 24, 2025, with unanimous support from all attending directors [8][39][42]. - The board confirmed that the repurchase plan complies with relevant laws and regulations, emphasizing its necessity and feasibility for the company's growth [42]. Group 3: Financial Impact and Share Structure - As of June 30, 2025, the company's total assets were RMB 1,778.33 million, and the net assets attributable to shareholders were RMB 1,013.61 million [17]. - If the maximum repurchase amount of RMB 100 million is utilized, it would represent 5.62% of total assets and 9.87% of net assets, indicating that the repurchase is not expected to significantly impact the company's operations or financial status [17][19]. - The repurchased shares will be transferred within three years after the repurchase results are announced; if not transferred, they will be canceled [19][20].

Core Viewpoint - The core feature of "Lighthouse Factories" is the large-scale application of IoT, AI, and big data analytics, significantly enhancing production efficiency and resource utilization while achieving breakthroughs in sustainable development [1] Policy Support - The government is vigorously supporting the development of industrial AI through a series of policies aimed at promoting the intelligent transformation of manufacturing to enhance national competitiveness [1] - The State-owned Assets Supervision and Administration Commission (SASAC) has deployed the "AI+" initiative, which includes multiple approaches such as R&D and application of large models, promoting high-value scenario applications, enhancing intelligent computing power supply, and strengthening element support [1] - The Ministry of Industry and Information Technology (MIIT) has released the "Implementation Plan for Promoting Equipment Updates in the Industrial Sector," which further details policy requirements to promote the intelligent and digital transformation of industrial equipment [1] Technological Development - The MIIT and seven other departments have issued the "Implementation Opinions on Promoting Innovation and Development of Future Industries," emphasizing the need to break through key technologies for humanoid robots and promote their widespread application in intelligent manufacturing [1] - The integration of humanoid robots with AI technology aims to form core competitiveness with independent intellectual property rights [1] Company Initiatives - The company is actively participating in the construction and development of AI-driven "Lighthouse Factories," innovating and fully implementing a new industrial AI-driven enterprise intelligent operation framework of "1+2+N" [1] - The company is applying advanced products and technologies such as the Universal Control System (UCS), Time Series Large Model (TPT), million-point real-time database, and online calorific value analyzer to help enterprises build globally leading smart factories and create world-class industry benchmark projects [1] - The company plans to continue deepening innovation and application in industrial AI to assist more enterprises in achieving intelligent transformation [1]

Core Viewpoint - The core feature of "Lighthouse Factories" is the large-scale application of IoT, AI, and big data analytics, significantly enhancing production efficiency and resource utilization while achieving breakthroughs in sustainable development [1] Group 1: Government Policies and Support - The government is vigorously supporting the development of industrial AI through a series of policies aimed at promoting the intelligent transformation of the manufacturing industry to enhance national competitiveness [1] - The State-owned Assets Supervision and Administration Commission (SASAC) has deployed the "AI+" special action plan, which includes multiple approaches such as R&D and application of large models, promoting high-value scenario applications, enhancing intelligent computing power supply, and strengthening element support [1] - The Ministry of Industry and Information Technology (MIIT) has released the "Implementation Plan for Promoting Equipment Updates in the Industrial Sector," which further details policy requirements to promote the intelligent and digital transformation of industrial equipment [1] Group 2: Company Initiatives and Innovations - The company is actively participating in the construction and development of AI-driven "Lighthouse Factories," innovating and fully implementing a new industrial AI-driven enterprise intelligent operation framework called "1+2+N" [1] - The company is applying advanced products and technologies such as the Universal Control System (UCS), Time Series Large Model (TPT), million-point real-time database, and online calorific value analyzer to help enterprises build globally leading smart factories and create world-class industry benchmark projects [1] - The company will continue to deepen innovation and application in industrial AI to assist more enterprises in achieving intelligent transformation [1]