Core Viewpoint - The company is experiencing significant growth in its non-GAAP net profit and maintaining a high level of prosperity in its smart IoT business, driven by initiatives in open-source HarmonyOS, open-source Euler, and enterprise-level AI [1]. Financial Performance - The company forecasts a target price of 76.80 yuan and maintains a "buy" rating, predicting EPS for 2025-2027 to be 0.24, 0.28, and 0.33 yuan respectively, with a PE of 320 times for 2025 based on comparable company valuations [2]. - In the first half of 2025, the company reported revenue of 1.747 billion yuan, a year-on-year increase of 10.55%, with a net profit attributable to shareholders of 60 million yuan, down 29.43%, and a non-GAAP net profit of 52 million yuan, up 47.33% [2]. - In the second quarter of 2025, revenue reached 914 million yuan, a year-on-year increase of 12.88%, with a net profit attributable to shareholders of 29 million yuan, down 51.60%, and a non-GAAP net profit of 25 million yuan, up 69.61% [2]. - The financial technology business generated revenue of 890 million yuan in the first half of 2025, up 6.06%, while the smart IoT business generated 606 million yuan, up 23.85% [2]. Business Development - The company is actively integrating AI technologies into its financial services, covering six major state-owned banks, 12 joint-stock banks, and over 280 licensed financial institutions by mid-2025 [3]. - In the smart IoT sector, the company is developing a domestic "end-edge-cloud" security digital foundation for industrial interconnectivity, leveraging AI technology for advanced applications [3]. - The company plans to implement new intelligent equipment-based solutions for smart distribution networks, substations, and new microgrids over the next three years [3]. - Innovative business segments achieved revenue of 368 million yuan in the first half of 2025, representing a year-on-year increase of 8.96% and accounting for 21.07% of total revenue [3]. AI Strategy - The company is focused on building a comprehensive AI technology stack, centered around a triad framework of "knowledge-perception-decision," which includes various AI-driven products such as multi-modal knowledge engines and decision-making agents [4]. - The company has developed an "AI hub" product matrix, including integrated hardware and three core software platforms, along with AI-driven testing service platforms and financial knowledge assistants [4].

Investment Rating - The report maintains a rating of "Accumulate" for the company with a target price of 76.80 CNY [5][12]. Core Insights - The company has shown significant growth in net profit excluding non-recurring items, with a strong performance in the smart IoT business, driven by open-source HarmonyOS, Euler, and enterprise-level AI [2][12]. - The financial forecast indicates a steady increase in revenue and net profit over the next few years, with projected revenues of 3,838 million CNY in 2025 and 5,072 million CNY in 2027, reflecting growth rates of 12.9% and 15.4% respectively [4][12]. - The company is actively integrating AI technologies into its financial services, expanding its reach to major state-owned banks and over 280 small and medium-sized banks [12]. Financial Summary - Revenue is projected to grow from 3,106 million CNY in 2023 to 5,072 million CNY in 2027, with a compound annual growth rate (CAGR) of approximately 15.4% [4][12]. - Net profit attributable to the parent company is expected to increase from 164 million CNY in 2023 to 266 million CNY in 2027, with a notable growth rate of 20.6% in 2027 [4][12]. - The earnings per share (EPS) is forecasted to rise from 0.21 CNY in 2023 to 0.33 CNY in 2027 [4][12]. Business Development - The company is focusing on building a comprehensive AI technology stack, including a product matrix centered around knowledge, perception, and decision-making [12]. - The smart IoT segment is expected to maintain high growth, with revenue from this sector projected to reach 6.06 billion CNY in 2025, reflecting a year-on-year growth of 23.85% [12]. - The company aims to implement innovative solutions in smart energy, including new intelligent equipment and smart distribution network solutions over the next three years [12].

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [5] Core Insights - The company reported a revenue of 1.747 billion yuan, a year-on-year increase of 10.55%. The net profit attributable to shareholders was 60 million yuan, a year-on-year decrease of 29.43%, while the net profit after deducting non-recurring items was 52 million yuan, a year-on-year increase of 47.33%. The gross margin was 23.72%, a decrease of 2.36 percentage points year-on-year [2] - The company is focusing on autonomous innovation business, with sales revenue from innovation business reaching approximately 368 million yuan in the first half of 2025, an increase of 8.96% year-on-year, accounting for 21.07% of total revenue [2] - The company has a clear AI strategic layout, providing end-to-end large model solutions across various industries, including finance, energy, and retail, through a comprehensive technology system covering AI chips, servers, operating systems, and full-stack AI platforms [3] Business Performance Summary - The financial technology segment achieved revenue of 890 million yuan, a year-on-year increase of 6.06%, with a gross margin of 23.34%. The intelligent IoT segment achieved revenue of 606 million yuan, a year-on-year increase of 23.85%, with a gross margin of 24.62%. The smart energy information segment achieved revenue of 200 million yuan, a year-on-year increase of 4.65%, with a gross margin of 23.27% [2] - The company is developing a comprehensive AI ecosystem, including the "IntelliCoreAI" computing integration machine and the AIRUNS integrated intelligent engine for flexible deployment and lifecycle management of AI large models [3] Profit Forecast and Valuation - The company is expected to achieve revenues of 3.832 billion yuan, 4.416 billion yuan, and 5.141 billion yuan for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 12.73%, 15.23%, and 16.42%. The net profit attributable to shareholders for 2025 is projected to be 187 million yuan, corresponding to a PE ratio of 275 times [9]

Financial Performance - The company reported a total revenue of 3.399 billion yuan for the year, representing a year-on-year growth of 9.43% [1] - The net profit attributable to shareholders was 161 million yuan, showing a decline of 1.64% compared to the previous year [1] - The gross margin for the year was 23.68%, which is a slight decrease from the previous year [1] - Operating cash flow for the year was 36 million yuan, indicating a certain decline year-on-year [1] Business Segment Performance - The financial technology segment generated revenue of 1.827 billion yuan, with a year-on-year growth of 7.09% and a gross margin of 23.01% [1] - The smart IoT segment achieved revenue of 1.066 billion yuan, reflecting a growth of 17.13% year-on-year and a gross margin of 24.44% [1] - The smart energy information segment reported revenue of 387 million yuan, with a year-on-year increase of 12.80% and a gross margin of 24.31% [1] Quarterly Performance - In Q4, the company achieved revenue of 990 million yuan, which is a year-on-year increase of 4.87% [2] - The net profit attributable to shareholders for Q4 was 50 million yuan, down 23.16% year-on-year [2] - The gross margin for Q4 was 18.50% [2] - Operating cash flow for Q4 was 358 million yuan, showing a slight decline year-on-year [2] AI Strategy - The company is fully committed to AI, developing a comprehensive technology system that includes AI chips, servers, operating systems, and a full-stack AI platform [3] - The AI strategy aims to provide end-to-end large model solutions for industries such as finance, energy, and retail, facilitating rapid deployment of intelligent scenarios [3] - The company has established a cloud-edge-end intelligent ecosystem, focusing on high-density and high-compatibility computing support for model training and inference [3] - A product matrix centered around a three-dimensional collaborative framework has been developed, including various AI engines to support enterprise-level AI capabilities [3] Revenue Forecast and Valuation - The company is projected to achieve revenues of 3.832 billion yuan, 4.416 billion yuan, and 5.141 billion yuan for the years 2025, 2026, and 2027, with year-on-year growth rates of 12.73%, 15.23%, and 16.42% respectively [4] - The estimated net profit attributable to shareholders for 2025 is 187 million yuan, corresponding to a PE ratio of 207 times [4] - The company's position within the Huawei supply chain and its advantages in AI and existing customer channels are expected to support continued performance improvement [4]