Investment Rating - The report maintains a "Buy" investment rating for the company [1]. Core Insights - The company has shown strong performance in its AI business, particularly in the industrial AI sector, with significant revenue growth driven by AI products and services [5][6]. - The company reported a revenue of 738 million yuan for H1 2025, representing a year-on-year increase of 4.91%, and a net profit of 111 million yuan, up 18.75% year-on-year [5]. - The company is strategically optimizing its business structure by reallocating resources towards high-margin AI products and reducing investment in less efficient areas [6][7]. - The company is focusing on the "AI + Industry" approach, enhancing its market promotion efforts and developing benchmark cases to drive the adoption of AI solutions [7][8]. - The company forecasts revenues of 1.768 billion yuan, 2.084 billion yuan, and 2.439 billion yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 1.06 yuan, 1.30 yuan, and 1.55 yuan [9]. Financial Performance - In Q2 2025, the company achieved a revenue of 401 million yuan, a year-on-year increase of 33.99%, and a net profit of 62 million yuan, up 64.64% year-on-year [5]. - The company's AI product and service revenue reached 211 million yuan in H1 2025, marking a substantial growth of 145.60% year-on-year [5]. - The gross margin for H1 2025 was reported at 52.40%, an increase of 4.22 percentage points year-on-year, while the net profit margin was 21.48%, up 4.13 percentage points year-on-year [5]. Strategic Focus - The company is committed to enhancing its AI product development capabilities, focusing on the integration of AI with self-developed industrial software [6][7]. - The company is actively developing new features for its AI products, aiming to provide flexible and efficient digital solutions for both new and existing customers [8].

Core Viewpoint - The report highlights the strong performance of Nengke Technology's AI business, emphasizing its growth in the industrial AI sector and maintaining a "buy" rating for the company [1]. Financial Performance - In H1 2025, the company achieved revenue of 738 million yuan, a year-on-year increase of 4.91% - The net profit attributable to shareholders was 111 million yuan, up 18.75% year-on-year - The net profit after deducting non-recurring items was 101 million yuan, reflecting a 16.16% increase year-on-year - Contract liabilities reached 405 million yuan, a significant increase of 158.26% year-on-year - In Q2 2025, revenue was 401 million yuan, a year-on-year growth of 33.99% - The net profit attributable to shareholders in Q2 was 62 million yuan, up 64.64% year-on-year - The net profit after deducting non-recurring items in Q2 was 59 million yuan, a 76.91% increase year-on-year - AI products and services revenue in H1 2025 was 211 million yuan, a remarkable growth of 145.60% year-on-year - The gross margin for H1 2025 was 52.40%, an increase of 4.22 percentage points year-on-year, while the net profit margin was 21.48%, up 4.13 percentage points year-on-year [2]. Strategic Focus - The company is strategically optimizing its business structure, focusing on high-margin and high-growth areas - Resources are being reallocated from traditional software systems and services to AI product lines and high-margin industrial software segments - In H1 2025, the company increased R&D investment in AI products, enhancing capabilities in model development, agent development, data processing, and hardware-software adaptation [3]. - The company is expanding its product series around AI applications, including "AI + embodied product intelligence," "AI + industrial manufacturing intelligence," and "industrial software + AI intelligent assistant" [3]. Industrial AI Development - The company is concentrating on "AI + industrial" applications, emphasizing quantifiable, reusable, and high-value scenarios - It is actively promoting AI products and solutions to meet the needs of leading industry clients, creating benchmark cases, and achieving scale effects - Some AI products have shown good reuse across enterprises and industries, with significant progress in industrial applications - The company is accelerating the development and application of its "Le" series AI intelligent modules, enhancing the integration of AI with self-developed industrial software [4]. Earnings Forecast - The company forecasts revenues of 1.768 billion yuan, 2.084 billion yuan, and 2.439 billion yuan for 2025, 2026, and 2027 respectively - Earnings per share (EPS) are projected to be 1.06 yuan, 1.30 yuan, and 1.55 yuan for the same years - The current stock price corresponds to price-to-earnings (PE) ratios of 50.0, 40.8, and 34.2 times for 2025, 2026, and 2027 respectively, maintaining a "buy" investment rating [5].

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 57.37 [1][5]. Core Views - The company is expected to accelerate the commercialization of its AI Agent products, which may lead to significant revenue growth [1][3]. - The strategic contraction of traditional business and effective cost control have improved the company's profitability, with a gross margin of 52.40% in H1 2025, up 4.22 percentage points year-on-year [2]. - The company's self-developed AI products are driving substantial growth in contract liabilities, with a 158.26% year-on-year increase in contract liabilities to RMB 4.05 billion in H1 2025 [3]. - Continuous investment in AI product development is leading to accelerated iterations of two major AI product lines, enhancing the company's offerings [4]. Summary by Sections Financial Performance - In H1 2025, the company achieved revenue of RMB 738 million, a year-on-year increase of 4.91%, and a net profit attributable to the parent company of RMB 111 million, up 18.75% year-on-year [1]. - Q2 2025 revenue reached RMB 401 million, representing a year-on-year growth of 33.99% and a quarter-on-quarter increase of 19.19% [1]. Cost Management - The company has effectively reduced sales and management expenses, with the sales expense ratio decreasing by 4.37 percentage points to 5.43% in Q2 2025, and the management expense ratio down by 2.40 percentage points to 5.64% [2]. Product Development - The company is enhancing its AI capabilities through the "Ling Series" and "Le Series" products, focusing on intelligent upgrades in industrial applications [4]. - The integration of AI with self-developed industrial software is being accelerated, providing flexible and efficient digital solutions for clients [4]. Earnings Forecast - The earnings per share (EPS) forecasts for 2025, 2026, and 2027 are RMB 1.03, RMB 1.21, and RMB 1.33 respectively, reflecting confidence in the ongoing commercialization of AI products [5][11].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company's performance in AI exceeded market expectations, with significant growth in contract liabilities [2][8] - The company reported a revenue of 738 million yuan in H1 2025, a year-on-year increase of 4.91%, and a net profit attributable to shareholders of 111 million yuan, up 18.75% year-on-year [2] - The AI business achieved a revenue of 211 million yuan in H1 2025, representing a year-on-year growth of 145.60% [8] Financial Summary - Revenue projections for 2025-2027 are 1.823 billion yuan, 2.192 billion yuan, and 2.572 billion yuan, with corresponding growth rates of 21%, 20%, and 17% [8] - Net profit attributable to shareholders is forecasted to be 254 million yuan, 316 million yuan, and 394 million yuan for 2025-2027, with growth rates of 32%, 25%, and 24% respectively [8] - The latest diluted EPS for 2025 is projected at 1.04 yuan, with a P/E ratio of 42.26 [1][8]