Investment Rating - The report initiates coverage with a "Buy" rating for the company [5]. Core Insights - The company has established itself as a leading provider in the energy IoT sector, with a strong focus on international market expansion, particularly in regions along the Belt and Road Initiative [3][4]. - The company has demonstrated robust financial performance, with significant revenue and net profit growth driven by both domestic and international markets [3][30]. - The company is well-positioned in the market with a comprehensive product portfolio that spans the entire energy IoT value chain, enhancing its competitive advantage [4][47]. Summary by Sections Company Overview - Founded in 2004, the company is one of the earliest entrants in the energy IoT market in China and was listed on the Shanghai Stock Exchange's Sci-Tech Innovation Board in 2020 [3][20]. - The company emphasizes international business development and actively participates in energy IoT projects in Belt and Road countries, establishing stable business channels in Asia, Africa, and the Americas [3][4]. Financial Performance - In 2024, the company achieved total revenue of 2.745 billion yuan, a year-on-year increase of 23.35%, and a net profit of 631 million yuan, up 20.07% [3][30]. - For the first half of 2025, the company reported revenue of 1.368 billion yuan, reflecting an 11.88% year-on-year growth, and a net profit of 305 million yuan, up 12.24% [3][30]. - The company forecasts revenues of 3.023 billion yuan, 3.456 billion yuan, and 4.055 billion yuan for 2025, 2026, and 2027, respectively, with corresponding net profits of 712 million yuan, 801 million yuan, and 925 million yuan [5][11]. Market Position and Product Portfolio - The company has a full industry chain layout, covering various levels of energy IoT, from application systems to data transmission management devices and intelligent monitoring terminals [4][47]. - The company has received multiple international certifications, including FCC and CE-RED, which support its international expansion strategy [4][5]. - The company’s products are recognized and certified in multiple international markets, with a focus on ASEAN countries, the Middle East, and stable African economies [4][5]. Growth Drivers - The overseas market is expected to become a significant growth driver, with the company increasing its overseas team and expanding production capacity [3][5]. - The company’s communication gateway products have become its largest revenue contributor, driven by increased investments in digital infrastructure by state-owned power companies [72][74]. - The company’s sensing layer products, particularly electric monitoring terminals, have shown sustainable growth, supported by increased investments in the power grid [51][55]. Profitability and Cost Management - The company’s gross margin has improved from 32.68% in 2018 to 39.74% in 2024, although it experienced a slight decline in 2024 due to revenue growth and structural changes [39][43]. - The company maintains stable cost control, with a decrease in the expense ratio from 14.34% in 2024 to 12.99% in the first half of 2025 [43][44].

Core Viewpoint - Weisheng Information Technology Co., Ltd. has shown a significant stock price increase of 5.19%, reaching 37.70 CNY per share, with a total market capitalization of 18.537 billion CNY [1] Company Overview - Weisheng Information was established on May 8, 2004, and went public on January 21, 2020. The company is located in Changsha High-tech Industrial Development Zone, Hunan Province [1] - The main business involves the research, production, and sales of IoT hardware and software products, including electric monitoring terminals, water and gas thermal sensing terminals, communication gateways, communication modules, and smart public utility management system software [1] - The revenue composition of the main business includes: Communication gateways (32.56%), Electric monitoring terminals (28.92%), Communication modules (19.41%), Smart public utility management systems (12.25%), Water and gas thermal sensing terminals (6.39%), and Others (0.48%) [1] Fund Holdings - Dachen Fund has a significant holding in Weisheng Information, with its Dachen Specialized and New Mixed A Fund (014651) holding 51,000 shares, representing 4.72% of the fund's net value, ranking as the sixth-largest holding [2] - The fund has a total scale of 34.1169 million CNY and has achieved a year-to-date return of 20.12%, ranking 4277 out of 8173 in its category [2] Fund Manager Performance - The fund manager of Dachen Specialized and New Mixed A Fund is Yu Weiye, who has been in the position for 1 year and 266 days. The fund's total asset size is 758 million CNY [3] - During Yu Weiye's tenure, the best fund return was 40.03%, while the worst return was 8.4% [3]

Summary of Weisheng Information Conference Call Company Overview - **Company**: Weisheng Information - **Period**: First half of 2025 Key Financial Metrics - **Revenue**: 1.364 billion CNY, a quarter-on-quarter increase of 46% [2][3] - **Net Profit**: 166 million CNY, a quarter-on-quarter increase of 19% [2][3] - **New Orders**: 1.627 billion CNY, a year-on-year increase of 8.3% [2][3] - **Backlog Orders**: 3.956 billion CNY, a year-on-year increase of 12.63% [2][3] - **R&D Investment**: 7.6% of revenue, with R&D personnel making up 51.5% of the workforce [2][4] - **Return on Equity**: 9.18% [3] - **Debt Ratio**: 34.8% [3] - **Cash Flow**: Net inflow of 178 million CNY, a year-on-year improvement of 11% [3] Innovation and Product Development - **New Products**: Launched 36 innovative products, generating 642 million CNY in revenue, accounting for 47% of total revenue, with a year-on-year growth of 49% [2][4][5] - **AI Applications**: Developed multiple AI technologies and products, focusing on integrating lightweight AI models into various terminal devices [2][10][13] Shareholder Returns - **Share Buyback**: 150 million CNY used to repurchase 4.23 million shares [5] - **Dividends**: First interim dividend of 2.5 CNY per 10 shares, with total dividends and buyback amounting to 81.7% of net profit [5] International Expansion Strategy - **"Going Global" Strategy**: Actively expanding into international markets, with significant progress in: - **Southeast Asia**: Local factory in Indonesia operational [6][7] - **Middle East**: Factory in Saudi Arabia under construction [6][7] - **Americas**: Land and factory procurement completed in Mexico [6][7] - **Other Regions**: Subsidiary approvals in UAE, Bangladesh, and Egypt [2][6] Market Trends and Opportunities - **China's Grid Investment**: Expected to exceed 800 billion CNY, focusing on smart distribution network upgrades [9] - **New Procurement Models**: Shift from provincial to regional joint procurement may increase competition but also larger order opportunities [22] Collaboration and Partnerships - **Partnership with Huawei**: Enhanced digital capabilities and market competitiveness through collaboration in power digitalization [4][12][15] Future Outlook - **Revenue Growth**: Anticipated increase in international revenue to match or exceed employee ratios [17] - **Profitability**: Expected higher profit margins in overseas markets compared to domestic due to less competition [18] Risk Management - **Project Security**: Ensuring project funding is backed by government guarantees or insurance to mitigate risks in new markets [19] Sustainability Initiatives - **Zero Carbon Goals**: Actively participating in national zero carbon projects and developing standards for international markets [20] Financing Strategies - **RWA Financing**: Exploring Real World Assets (RWA) for cross-border financing, particularly in the Middle East [21][23] This summary encapsulates the key points from the Weisheng Information conference call, highlighting the company's financial performance, innovation efforts, international expansion, and strategic outlook.

Investment Rating - The report maintains a "Strong Buy" rating for the company [4]. Core Views - The company is a leading provider of energy IoT solutions, showcasing strong internal growth momentum with significant revenue and profit increases projected for the coming years [7]. - The international expansion strategy has yielded notable results, with a focus on the Middle East and the establishment of an overseas factory in Indonesia, driving substantial growth in international revenue [7]. - The company is well-positioned to benefit from increased investments in the domestic power grid, with a projected total investment of over 6,500 billion yuan by the State Grid in 2025 [7]. - The development of self-researched chips creates a competitive edge, ensuring a robust order backlog that supports future growth [7]. - The company is expected to see significant profit growth from 2025 to 2027, with attractive valuation metrics [7]. Company Overview - The company specializes in providing comprehensive IoT solutions across the entire industry chain, including sensing, networking, and application layers [12]. - Key products include electric monitoring terminals, water and gas sensors, communication gateways, and IoT application solutions [12][16]. Financial Data and Valuation - Projected total revenue for 2023 is 2,225 million yuan, with a year-on-year growth of 11%, and expected to reach 6,146 million yuan by 2027 [3]. - The net profit attributable to shareholders is projected to grow from 525 million yuan in 2023 to 1,280 million yuan in 2027, reflecting a compound annual growth rate of approximately 27% [3]. - The company’s current price-to-earnings (PE) ratio is 31.3, expected to decrease to 12.8 by 2027, indicating an attractive valuation [3]. Industry Overview - The electric monitoring terminal market is experiencing rapid growth due to the acceleration of smart grid construction and the digital transformation of industries [25]. - The demand for water, gas, and heat sensing terminals is increasing, driven by the need for efficient resource management in urban public utilities [28]. - Communication modules are essential for enabling data transmission between devices, with a growing market for smart home and industrial applications [32]. Investment Logic - The company’s early market positioning and dual growth drivers from the Middle East and emerging markets are expected to create future value [7]. - Record-breaking investments in the power grid are anticipated to enhance the company’s growth prospects in the smart grid sector [7]. - The collaboration with leading enterprises and strategic partnerships in the IoT space strengthens the company’s market position [20][21].