Group 1: Company Strategy and Transformation - The company has transitioned from "建科股份" to "联检科技," reflecting a redefined vision and commitment to integrated inspection and testing services [3] - The mission is to empower quality ecosystems through technology, focusing on sustainable development and innovation [3] - The internationalization strategy includes three phases: initial focus on "Belt and Road" initiatives, mid-term technical reciprocity with Europe and the U.S., and long-term global network collaboration [3] Group 2: Business Performance and Market Position - The company has experienced pressure on net profit due to the slowdown in real estate and infrastructure investments, prompting a strategic shift towards emerging sectors [2] - Recent acquisitions have expanded capabilities in electronic, automotive, and food testing sectors, enhancing overall business performance [2][4] - The company aims to maintain a core focus on inspection and testing while diversifying through mergers and acquisitions to improve competitiveness [4] Group 3: Technological Innovation and Development - The company is investing in digitalization and smart technologies to enhance service efficiency and quality, including the development of AI and IoT applications [6][9] - A digital twin integrated platform has been established to create a comprehensive safety monitoring system [6] - The company is actively pursuing R&D collaborations to drive innovation in emerging technologies, particularly in synthetic biology and medical data [9] Group 4: Market Expansion and Future Growth - The company is expanding its market presence beyond Jiangsu, with operations established in Vietnam, Thailand, Indonesia, and the UAE [2][3] - Future growth will be driven by focusing on high-value sectors such as renewable energy, electronics, and automotive components [4][8] - The establishment of an industry fund aims to support investments in inspection and testing projects, as well as new energy and smart manufacturing sectors [8] Group 5: Competitive Strategy and Industry Trends - The company adopts a dual strategy of internal growth and investment mergers to enhance market coverage and technical capabilities [7] - The trend towards industry consolidation presents opportunities for the company to increase market share and improve operational efficiency [8] - The company is addressing competitive challenges by enhancing its technological strength and expanding its international market footprint [7][8]

Investment Rating - The report suggests a focus on leading companies with strong management and brand recognition in the testing service industry, particularly recommending companies like Huace Testing, Sutest, and Guangdian Measurement [6][13][44]. Core Viewpoints - The testing service sector is under pressure, with a focus on lean management and the expansion of emerging industries. The overall revenue for the sector in 2024 is projected to be 46.8 billion RMB, a decrease of 4% year-on-year, primarily due to macroeconomic slowdowns and ongoing policy impacts in the pharmaceutical and special industries [4][18]. - The sector's growth is closely tied to macroeconomic performance, with expectations for recovery in demand due to government debt relief and stimulus policies [5][75]. - The industry is experiencing a trend towards consolidation, with resources expected to concentrate among leading firms that possess brand, capital, and management advantages [5][70]. Summary by Sections Revenue Performance - In 2024, the testing service sector achieved a revenue of 46.8 billion RMB, down 4% year-on-year. Excluding companies with high medical testing ratios, the sector's revenue was 25.8 billion RMB, showing a 4% increase year-on-year [4][18]. - The first quarter of 2024 saw a revenue of 9 billion RMB, a 9% decline year-on-year, but excluding high medical testing companies, the revenue growth rate improved to 2% [4][18]. Profitability - The sector's net profit for 2024 is expected to be 1.8 billion RMB, a significant decline of 56% year-on-year, attributed to decreased revenue, rigid laboratory costs, and reduced government subsidies [25]. - Leading companies like Huace Testing and Guangdian Measurement showed resilience, with net profit growth rates of 1% and 77% respectively in 2024 [25][18]. Market Trends - The global testing service market is projected to reach approximately 2.3 trillion RMB in 2024, with a compound annual growth rate (CAGR) of about 6% from 2021 to 2024. China's testing service industry has historically grown at about twice the GDP growth rate [5][58]. - The industry is characterized by a high degree of fragmentation, with small and weak players facing challenges in capital and management, leading to a trend towards consolidation [69][70]. Emerging Opportunities - New sectors such as semiconductors and low-altitude economy are developing rapidly, creating new demands for testing services that require significant capital and technical capabilities [6][70]. - The report emphasizes the importance of government policies in supporting the testing service industry, particularly through debt relief measures that could enhance demand recovery [75][86].