Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 20.93 [1][5]. Core Views - The company reported a significant decline in revenue for H1 2025, with a year-over-year decrease of 40.16%, primarily due to tightened customer budgets. However, the gross margin improved to 51.49%, up by 10.77 percentage points year-over-year, indicating a focus on enhancing business quality [2][5]. - The company is accelerating its strategic investments in quantum-resistant encryption and platform services, with the first pilot of a quantum-resistant product launched in the financial sector. It plans to raise RMB 160 million for industrialization [2][4]. - The company is expanding its market presence in various sectors, including government and military, and has successfully won multiple city-level encryption service platform projects [3][4]. Summary by Sections Financial Performance - In H1 2025, the company achieved revenue of RMB 116 million, with a net loss of RMB 72.69 million, reflecting a year-over-year decline of 44.16% in net profit. Q2 revenue was RMB 70.02 million, down 51.63% year-over-year [1][2]. Strategic Initiatives - The company is focusing on new security scenarios, particularly in quantum-resistant encryption, and has made significant progress in integrating its products with major cloud platforms like Huawei and Alibaba [4][5]. - The company has become one of the first encryption vendors in the HarmonyOS NEXT ecosystem, enhancing its product compatibility and integration with major tech players [4]. Market Expansion - The company is actively expanding into new markets and sectors, including tobacco, finance, and customs, leveraging its strengths in the central China region to accelerate growth in the public sector [3][4]. - The company’s expenses have increased due to accelerated market expansion and technology development, with sales, management, and R&D expense ratios rising significantly [3]. Profitability Forecast - Revenue forecasts for 2025-2027 have been adjusted downwards by 8.26%, 11.74%, and 12.51% respectively, while net profit forecasts have been reduced by 10.43%, 5.40%, and 5.63%. The expected EPS for 2025 is RMB 0.33, with a CAGR of 45.44% for net profit [5][11].

Core Viewpoint - Geer Software reported a revenue of 116 million yuan for the first half of 2025, indicating short-term fluctuations in performance due to cyclical revenue structures and adjustments in the cybersecurity industry. The company aims to strengthen its dual-driven strategy of "technological innovation + market deepening" for sustainable growth [1] Group 1: Financial Performance - In the first half of 2025, Geer Software achieved an operating income of 116 million yuan [1] Group 2: Technological Development - Geer Software focuses on the information security industry, developing products related to digital trust and data security, including identity management and data encryption [2] - The company has made significant progress in quantum-resistant cryptography (PQC) and has upgraded its entire line of cryptographic products to enhance compatibility with real-world applications [2] - Geer Software has implemented a quantum-resistant cryptography service platform for China Galaxy Securities, marking a step towards creating a "digital moat" for the securities industry [2] Group 3: International Strategy - As a member of the National Cryptography Administration's infrastructure group, Geer Software has led and participated in over 100 national and industry standards [3] - The company is expanding its industry collaborations and has become one of the first HarmonyOS Next cryptography vendors, ensuring compatibility with the latest operating systems [3] - Geer Software is accelerating its international strategy by integrating PKI technology with emerging technologies like AI and quantum-resistant cryptography, responding to the growing global commercial cryptography market [3] - In June 2025, the company launched the first domestic all-quantum integrated network and data security solution based on quantum-resistant cryptography at the China (Shanghai) International Technology Import and Export Fair [3]