Core Viewpoint - The report indicates a slight decrease in institutional ownership of Shibao Testing, with a total of 69.72 million shares held by seven institutional investors, representing 58.11% of the total share capital, down by 1.18 percentage points from the previous quarter [1] Institutional Ownership - As of October 27, 2025, seven institutional investors disclosed their holdings in Shibao Testing, totaling 69.72 million shares, which is 58.11% of the company's total share capital [1] - The institutional investors include Shipu (Shanghai) Enterprise Management Co., Ltd., Rizhao Zhongyi Ren Private Fund Management Co., Ltd., Shanghai Weili Enterprise Management Co., Ltd., Shanghai Yishi Enterprise Management Consulting Partnership (Limited Partnership), Shibao Testing Technology (Shanghai) Co., Ltd. - 2024 Employee Stock Ownership Plan, CITIC Securities Asset Management (Hong Kong) Co., Ltd. - Client Funds, and Huatai Securities Co., Ltd. [1] - The total institutional ownership percentage decreased by 1.18 percentage points compared to the previous quarter [1] Public Fund and Foreign Investment - In this period, nine public funds were not disclosed compared to the previous quarter, including funds such as China Europe Small Cap Growth Mixed A, E Fund Yi Bai Intelligent Quantitative Strategy Mixed A, GF Quantitative Multi-Factor Mixed A, Xin'ao Xingrui Smart Selection Mixed A, and Xin'ao Ningjun Smart Selection Mixed A [1] - One new foreign institution disclosed its holdings this quarter, namely CITIC Securities Asset Management (Hong Kong) Co., Ltd. - Client Funds, while one foreign institution, China Merchants Securities International Co., Ltd. - Client Funds, was not disclosed compared to the previous quarter [1]

Summary of Huace Testing Conference Call Company Overview - **Company**: Huace Testing - **Industry**: Testing, Inspection, and Certification (TIC) Key Financial Performance - **Revenue**: In the first three quarters of 2025, revenue reached 6.6 billion CNY, a year-on-year increase of 9.26% [2][3] - **Net Profit**: Net profit attributable to shareholders was 1.812 billion CNY, with a net profit margin of 17.28%, up by 0.29 percentage points year-on-year [2][3] - **Operating Cash Flow**: Operating cash flow net amount was 596 million CNY, a significant increase of 11% year-on-year [2][3] - **Q3 Performance**: In Q3 2025, revenue was 1.742 billion CNY, up 8.53% year-on-year, with net profit of 345 million CNY, an increase of 11.24% [3] Business Segment Performance - **Life Sciences**: Benefited from improved efficiency and precise market positioning, with notable performance in food testing [2][5] - **Environmental Testing**: Focused on traditional markets while expanding into emerging fields [2][5] - **Consumer Testing**: Significant progress in new energy vehicles and aerospace sectors [2][5] - **Pharmaceutical and Medical Services**: Strategic investments led to rapid gross margin improvement; CRO business expanded through acquisitions [2][5][7] - **International Strategy**: Accelerated internationalization through acquisitions, such as Safety SA in South Africa, enhancing global capabilities [2][11] Digital Transformation and AI Integration - **Digital Tools**: Implementation of ERP systems and various digital tools like BI and RPA to enhance operational efficiency [2][16] - **AI Applications**: Ongoing exploration of AI applications across multiple fields to improve efficiency and reduce labor needs [2][16] Future Outlook - **Growth Projections**: Anticipated acceleration in growth for Q4 2025, driven by new acquisitions contributing to overall performance [4][22] - **Long-term Strategy**: The pharmaceutical and medical services segment is expected to recover to 10% of the group's revenue share, with significant potential for growth in emerging fields [10][9] International Expansion - **Focus Areas**: Future international expansion will target consumer goods, shipping, and food sectors, with a preference for acquisitions related to product certification and digital certification [14][15] - **Market Opportunities**: South Africa and Southeast Asia identified as key regions for growth, with plans to leverage local resources and regulatory frameworks [12][15] Competitive Advantages - **Global Positioning**: Huace Testing's acquisitions enhance its competitive edge in various regions, allowing for localized testing and certification services [20][21] Conclusion - **Overall Sentiment**: The company maintains an optimistic outlook for future growth, supported by strategic acquisitions and a focus on digital transformation and international expansion [6][22]

Core Points - The company Shupu Testing Technology (Shanghai) Co., Ltd. was fined 140,000 RMB and ordered to suspend operations due to falsifying monitoring data [1][2] - The violation occurred during a comparison test of emissions from Hefei Changfeng Wan Energy Environmental Power Co., Ltd., where sampling personnel left the platform without conducting any sampling for over two hours [1][2] - The company issued a testing report on November 11, 2024, which included falsified hydrochloric acid monitoring data for specific time periods [1][2] Regulatory Context - The penalty was based on the Anhui Provincial Environmental Protection Regulations (2018), which stipulate fines for environmental monitoring institutions that fail to use compliant monitoring equipment and falsify data [2] - The company is required to undergo operational suspension as part of the administrative penalty [2] Company Overview - Shupu Testing (stock code: 301228) is a comprehensive testing company involved in various sectors, including environmental, agricultural products, food, consumer goods, medical devices, and metrology calibration [2] - The company also provides environmental governance, saline-alkali land improvement, technical consulting, robotic inspection, and environmental damage judicial appraisal services, aiming to offer ESG sustainable solutions to end customers [2]

Summary of Conference Call Records Company Overview - **Companies Involved**: 华测检测 (HuaCe Testing) and 广电计量 (Guangdian Measurement) - **Industry**: Testing and Measurement Services Key Points from HuaCe Testing 1. **Overall Performance**: HuaCe Testing's 2024 performance is in line with expectations, showing steady growth, but with varied performance across business segments [1][2] 2. **Environmental Testing**: Significant impact from the national soil survey, leading to expected pressure in 2025, with recovery anticipated in 2026 [1][4] 3. **Food and Agricultural Testing**: Maintains steady growth; increased demand from pet food and cosmetics testing [1][4] 4. **Industrial Testing**: Growth linked to industrial value-added; expected low-speed growth in 2025 [1][4] 5. **Consumer Testing**: Benefiting from new energy vehicles and semiconductor testing; currently in a loss-reduction phase [1][4] 6. **Trade Assurance**: High market share and gross margin, maintaining about 10% steady growth over the years [1][4] 7. **Medical and Pharmaceutical Testing**: Facing significant pressure but showing signs of recovery due to increased investment in innovative drug development [1][4][6] 8. **Profitability**: Net profit margin peaked at 18.02% in 2022, expected to decline to 15.33% in 2024 due to various pressures [1][10] 9. **Strategic Development**: Implementing a "123" strategy for differentiated development across business segments, enhancing new business expansion and operational efficiency [1][5] 10. **International M&A**: Successful acquisitions in Southeast Asia, Southern Europe, and South Africa, enhancing service capabilities [1][8][9] Key Points from Guangdian Measurement 1. **Performance in 2025**: Expected revenue of 14.5 to 15 billion, with a year-on-year growth of 7.9% to 11.6% [3][12] 2. **Profitability**: Anticipated net profit of 0.95 to 1 billion, with a year-on-year growth of 19.2% to 25.5% [3][12] 3. **Business Segments**: Traditional business may decline, but advanced manufacturing sectors like new energy vehicles and semiconductors show significant order growth [3][13] 4. **R&D Investment**: R&D expense ratio maintained at around 10%, focusing on new production capabilities [3][13] 5. **Net Profit Margin**: Expected to reach 6.6% in the first half of 2025, with a potential increase to 15% in the next three to five years [3][14][15] 6. **Management Changes**: New management team implemented refined management practices, leading to improved performance and higher dividend payouts [3][17] 7. **Valuation**: Current PE ratio of 24-25, considered relatively low historically, indicating limited downside risk [3][18] Additional Insights - **Market Trends**: Both companies are adapting to market changes and focusing on high-growth sectors to mitigate risks from traditional business declines [1][3][19] - **Future Outlook**: Positive growth outlook for both companies, with HuaCe Testing focusing on operational efficiency and Guangdian Measurement leveraging new management strategies for enhanced profitability [1][3][19]

Summary of Huace Testing Conference Call Company Overview - **Company**: Huace Testing - **Recent Acquisition**: Acquired South African company Fifty to enhance overseas expansion capabilities, particularly in food safety [2][4] Key Points and Arguments Acquisition Details - The acquisition of Fifty is aimed at strengthening Huace Testing's international presence and addressing weaknesses in training services [2][4] - The acquisition will be funded through cash, with sufficient cash flow to support the transaction without the need for stock issuance [2][6] Financial Performance - Overall revenue growth target for the year remains at 10%, despite seasonal uncertainties in quarterly performance [2][7] - Last year's Q2 revenue was approximately 1.6 billion, with the Sanpu business contributing about 100 million, accounting for roughly 6% [2][8] - The food testing segment showed robust performance with nearly 10% growth last year and 15% growth in Q1 of this year, expected to maintain around 10% growth for the year [2][10] - Environmental testing projects exceeded expectations in Q1 but are expected to face pressure in Q2 due to government budget tightening [2][9] - The pharmaceutical and medical segment incurred losses last year, with a goal to reduce losses this year, although the pressure to turn profitable remains significant [2][11] Business Segment Insights - The Beisbo business is gradually improving as equipment is being installed, while the Yima business is facing challenges in the German market but performing well in the US and Mexico [2][12] - The domestic automotive market remains stable, with Huace Testing achieving high single-digit growth and improved gross margins through enhanced internal lab efficiency [2][13][18] - The CRO business in drug testing is on an upward trend, with the CMC sector doubling last year and maintaining stability this year [2][14][15] Market and Industry Trends - The testing industry is experiencing intensified price competition due to increased market saturation, impacting profitability [2][17] - Huace Testing is exploring opportunities in the African market due to its recent growth, with potential future expansions into other regions based on market conditions [2][5] Capital Expenditure and Personnel Management - Capital expenditure has been reduced from 10% to 7% of revenue, reflecting a shift in investment strategy due to market conditions [2][21] - Personnel management will continue to align with revenue growth, with an emphasis on improving employee efficiency [2][22] Future Outlook - The company is optimistic about achieving its annual performance targets, although quarterly performance may vary based on seasonal factors [2][28] - The acquisition of the South African company is expected to be consolidated in the second half of 2025, with other potential acquisitions also in progress [2][29] Additional Important Insights - The company is investing in smart driving technologies and electric motor control, aligning with industry trends [2][19] - The development of standards in smart driving technology is still in its early stages, with ongoing collaborations with automotive manufacturers [2][20] - The trade assurance segment has shown over 15% growth in Q1, largely due to acquisitions made last year [2][16]