Core Viewpoint - Far East Holdings (600869.SH) is adopting a dual-driven model of "stable growth in traditional business + high elasticity in emerging sectors" to navigate challenges in the manufacturing industry, with significant growth in contract orders and a strategic shift towards energy and digital technology [1][2]. Group 1: Order Data and Business Resilience - The company reported a total of RMB 216.24 billion in contract orders exceeding 10 million yuan from January to September, marking an 8.37% year-on-year increase and a historical high [1][2]. - The traditional smart cable network segment is projected to achieve revenue of RMB 227.03 billion in 2024, with significant contributions from nuclear-grade cables and high-voltage cables [2]. - Emerging business segments, particularly smart batteries, are expected to see revenue growth of 180.47% in 2024, with contract orders increasing by 411.41% [2]. Group 2: Strategic Positioning in Emerging Fields - The company is focusing on three cutting-edge areas: controllable nuclear fusion, energy + computing + AI, and robotics, which are expected to create a long-term growth moat [3][4][5]. - In controllable nuclear fusion, the company has established itself as a key player, with products already applied in domestic projects and significant technical achievements [4]. - The energy + computing + AI strategy aligns with national policies and aims to build a green computing ecosystem, with ongoing advancements in hardware and technology [5][6]. Group 3: Valuation Logic and Market Perception - The market currently views the company primarily as a traditional cable leader, but breakthroughs in emerging businesses are reshaping its valuation framework [7]. - The company aims for a 210.60% year-on-year increase in net profit for the first half of 2025, driven by significant growth in AI, computing, and robotics sectors [7]. - As the company transitions towards a "technology growth" model, the valuation is expected to realign with its emerging business potential [7].

Core Insights - The company reported a robust performance in the first half of 2025, with revenue reaching 12.976 billion yuan, a year-on-year increase of 14.38%, and a net profit attributable to shareholders of 144 million yuan, up 210.60% [1] Group 1: Business Performance - The intelligent cable network business showed significant growth, achieving revenue of 11.486 billion yuan, a year-on-year increase of 11.64%, and a net profit of 271 million yuan, up 75.76% [1] - The overall gross margin of the company was 9.42%, with a net margin of 1.06%, indicating a steady improvement in profitability [1] Group 2: Intelligent Cable Network Business - The company is accelerating upgrades in the intelligent cable network sector, focusing on high-end and intelligent development [2] - The completion of the first phase of the Nantong submarine cable smart factory positions the company with a leading global production line for submarine cables [2] - Strategic partnerships have been formed with companies like Huadian New Energy and Shanghai Electric to expand into the offshore wind power market [2] Group 3: Artificial Intelligence and Robotics - The company has begun bulk supply of high-speed copper cables to leading global AI chip companies and is advancing research and production in liquid cooling technologies [2] - Strategic collaborations with robotics firms such as UBTECH and Zhiyuan Robotics have been established, covering various types of cables for robotic applications [2] Group 4: Smart Battery and Smart Airport Business - The smart battery segment is reducing losses, with revenue of 687 million yuan in the first half of 2025, a year-on-year increase of 40.13% [3] - The company is focusing on high-end markets and has launched the PowerSTROM7000 liquid cooling system, contributing to significant projects in energy storage [3] - The smart airport business continues to grow strongly, with revenue of 751 million yuan, a year-on-year increase of 37.46%, and multiple ongoing projects [3] Group 5: Future Projections - Revenue projections for the company from 2025 to 2027 are estimated at 29.99 billion yuan, 33.89 billion yuan, and 38.34 billion yuan, with net profits of 524 million yuan, 812 million yuan, and 1.005 billion yuan respectively [3]

Core Viewpoint - The company reported a decline in profitability for 2024 due to rising copper prices and increased losses in the smart battery segment, but showed signs of recovery in Q1 2025 with improved revenue and reduced losses in the smart battery business [1][2]. Group 1: 2024 Financial Performance - In 2024, the company achieved revenue of 26.094 billion yuan, a year-on-year increase of 6.66%, but reported a net profit of -318 million yuan, indicating a shift from profit to loss [1]. - The decline in net profit was primarily attributed to a significant increase in copper prices, which caused the gross margin of the smart cable network to drop from 12.38% in 2023 to 10.16% in 2024, a decrease of 2.22 percentage points [1]. - The smart cable network generated a net profit of 263 million yuan, down 70.11% year-on-year, while the smart battery business incurred a loss of 691 million yuan, an increase in loss of 512 million yuan [1]. Group 2: Q1 2025 Financial Performance - In Q1 2025, the company reported revenue of 4.874 billion yuan, a year-on-year increase of 1.3%, and a net profit of 45.9345 million yuan, a year-on-year increase of 84.65% [2]. - Revenue from the smart cable network, smart battery, and smart airport segments was 4.207 billion yuan, 329 million yuan, and 312 million yuan respectively, with year-on-year growth rates of -5.54%, 93.64%, and 80.92% [2]. - The smart battery segment showed a reduction in losses by 33.14%, while the smart airport segment's net profit increased by 115.88% [2]. Group 3: Future Outlook - The company anticipates a turning point in its traditional business in 2025, contingent on stable copper prices and the production of undersea cables, which could enhance the gross margin of the smart cable network [2]. - The smart battery business is expected to reduce losses due to sufficient orders and improved utilization rates of copper foil production [2]. - The smart airport segment is projected to benefit from policies promoting the low-altitude economy, leading to steady growth [2]. Group 4: Emerging Business Developments - The company is actively expanding into AI and robotics, leveraging its technological expertise from traditional businesses [3]. - In the AI sector, the company has secured a vendor code from a leading global AI chip company and is developing various products for high-speed copper cables and data transmission lines [3]. - In the robotics field, the company's flexible drag chain cables and robotic arm cables are being widely used, with strategic partnerships established with several robotics firms [3]. Group 5: Profit Forecast - The company forecasts net profits of 671 million yuan, 1.048 billion yuan, and 1.221 billion yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 0.30, 0.47, and 0.55 [4]. - The current stock price corresponds to PE ratios of 16, 10, and 9 for the years 2025, 2026, and 2027 [4].