Investment Rating - The report initiates coverage with an "Accumulate" rating for the company [2] Core Views - The company, Donggang Co., Ltd., has a solid foundation in printing business and is rapidly developing in smart cards and robotics. The company has been expanding its smart card business since 2010 and has seen significant growth in revenue and profit in recent periods [7][18] - The smart card business is experiencing explosive growth due to increasing demand in various sectors, including banking and social security, while the printing business is stabilizing after previous electronic impacts [8][21] - The company is also leveraging its channel advantages to explore high-potential robotics markets, which are expected to contribute to future revenue growth [8][27] Summary by Sections 1. Smart Card Business - The smart card business has seen explosive growth, with revenue increasing significantly in recent periods. The company achieved a revenue of 1.62 billion yuan in the first half of 2025, a year-on-year increase of 133.8% [7][21] - The demand for smart cards is stable, driven by the need for higher security and functionality compared to traditional magnetic stripe cards. The global demand for smart cards is expected to reach 9.58 billion units by 2024, with a compound annual growth rate (CAGR) of 0.9% from 2021 to 2024 [7][48] 2. Technical Services - The company is diversifying its technical services, including electronic ticketing and archival storage, which are expected to grow as industry penetration increases. The revenue from technical services is projected to grow steadily [8][27] - The company is also exploring opportunities in AI and robotics, with the global robotics market expected to grow at a CAGR of 16.4% from 2023 to 2028 [8][27] 3. Printing Business - The printing business is stabilizing after being significantly impacted by the shift to electronic invoicing. The company is focusing on improving production efficiency and expanding its market share in personalized color printing and commercial labels [8][21] - The gross margin for the printing business improved to 35.8% in the first half of 2025, reflecting effective cost control measures [8][27] 4. Financial Forecast and Valuation - The company is expected to achieve net profits of 188 million yuan, 228 million yuan, and 276 million yuan for the years 2025 to 2027, representing year-on-year growth rates of 19.3%, 20.9%, and 21.1% respectively [8][27] - The current market capitalization corresponds to price-to-earnings ratios of 32, 27, and 22 for the years 2025 to 2027, indicating potential upside based on industry comparisons [8][27]

Core Viewpoint - Donggang Co., Ltd. is experiencing a recovery in overall business performance, with significant growth in composite products and a positive outlook for AI robotics despite challenges in traditional printing due to digitalization [2][3]. Group 1: Business Performance - In the first half of 2025, the printing business faced a decline due to electronic impacts, but there are signs of recovery [2]. - Composite products saw over 130% year-on-year growth, driven by increased orders from both new and existing bank clients [2]. - The technical services segment, which includes document storage, electronic tickets, and AI robotics, is showing stable revenue and profit growth [2]. Group 2: Business Strategy and Development - The company is leveraging existing customer resources to expand into AI robotics, maintaining confidence in annual performance [2]. - The smart card business has a broad client base, including major state-owned banks, and has the capability to produce digital RMB wallets [3]. - The company has developed a blockchain electronic ticketing system based on proprietary technology, which is adaptable to various compliant payment tools [3]. Group 3: Corporate Governance and Structure - Since 2017, the company has operated without a controlling shareholder, ensuring a structured governance model where major decisions are made by the board and shareholders [3]. - The relationship with Ant Group involves previous investment in a subsidiary, with ongoing business connections [3]. Group 4: Future Plans and Market Position - The company aims to stabilize traditional business while aggressively developing new sectors such as smart cards, document storage, electronic tickets, and AI robotics over the next 3-5 years [3]. - Current robot applications are being developed for government and education sectors, indicating a significant demand [3]. - The company has sufficient self-funding and low debt levels, with no immediate refinancing plans, evaluating major investments as needed [3].

Group 1: Business Overview - The company operates in three main business segments: printing, lamination, and technical services [3][4] - Printing business includes commercial ticket printing, data processing and mailing services, personalized color printing, and commercial label printing [3] - Lamination business focuses on smart card manufacturing and RFID smart labels, covering various applications in logistics, manufacturing, and finance [4] Group 2: Financial Performance - For the first half of the year, the company achieved a revenue of CNY 581 million, remaining stable compared to the previous year [4] - Net profit attributable to shareholders was CNY 78.5 million, reflecting a growth of 10.87% year-on-year [4] - Revenue from printing products decreased by 21.28% due to the impact of digitalization, but gross margin improved by 3.37% [4] - Revenue from lamination products increased by 133.81%, with stable gross margins [4] Group 3: Challenges and Opportunities - Technical services revenue declined by 7.09% due to policy changes affecting paper-based VAT invoices [5] - The company is expanding production capacity to meet the growing demand for smart card products, driven by an increase in customer base and order amounts [6][8] - The smart card business is expected to maintain a positive growth trend in the coming years due to enhanced production capacity and service quality [8] Group 4: Market Position and Collaborations - The company serves major banks and has established long-term partnerships in the card issuance and initialization services [6] - It has developed capabilities for digital RMB products and is monitoring the market for digital currencies [6][7] - The company has a blockchain system architecture that is adaptable for various compliant payment tools [6]

Core Viewpoint - Donggang Co., Ltd. is actively engaging with institutional investors to discuss its business performance and future growth strategies, particularly in the areas of printing, composite products, and technical services, with a focus on AI and robotics development. Group 1: Business Overview - Donggang Co., Ltd. operates in three main product categories: printing, composite products, and technical services, with a total of nine subcategories, each holding significant influence in their respective fields [1][3]. - The traditional printing business has remained stable despite challenges from electronic ticketing, with a notable increase in market share due to product and service advantages [3][4]. - The composite products segment, particularly smart card products, has shown rapid revenue growth and established partnerships with major domestic banks, positioning the company as a leading smart card supplier [3][4]. Group 2: Technical Services and AI Development - The technical services segment has experienced steady growth, with revenue from document storage and electronic services increasing over recent years, making the company a leading service provider in the industry [4]. - The company has recognized the trend in AI technology and has increased investments in this area, developing various robotic products tailored to customer needs, including government and educational robots [4][10]. Group 3: Business Strategy and Market Position - The company maintains a strategy of sustaining traditional business while pursuing rapid development in new business areas [5]. - The smart card business is expected to continue its growth trajectory, with significant increases in revenue and profit anticipated in 2024 [6][7]. - The company is focused on expanding its market presence in the robotics sector, which, although currently a small part of overall business, is projected to grow significantly by 2025 [9][10]. Group 4: Blockchain and Dividend Policy - The company's blockchain business has not expanded significantly due to the small market capacity, primarily serving the electronic ticketing sector [11]. - Donggang Co., Ltd. has a stable cash dividend policy and intends to maintain this approach to reward shareholders [2][14].

Group 1: Business Overview - The company operates in three main product categories: printing, lamination, and technical services, with a total of nine subcategories [2] - The printing segment includes ticket printing, color printing, labels, and data printing, while the lamination segment focuses on smart cards and RFID tags [2] - Technical services encompass electronic tickets, AI robots, and document storage and digitization [2] Group 2: Printing Business Insights - The traditional printing business faces challenges due to the impact of ticket electronicization, but market share has increased, stabilizing demand for commercial tickets [2][3] - The company expects stable revenue from certificate printing, with steady growth in label and color printing segments [2] - Overall, the printing business revenue remains stable despite fluctuations in specific categories [4] Group 3: Lamination and Technical Services Growth - The smart card business has seen significant growth, with increased market share and revenue in 2024 [4] - Technical services, particularly document storage and digitization, have maintained revenue growth, establishing the company as a leading service provider in the sector [3][5] - AI technology investments have led to the development of various robots, including government and educational robots, which are expected to open new business avenues [3][5] Group 4: Challenges and Market Strategy - The company has no controlling shareholder, which has not impacted its operational business [3] - New business ventures are evaluated based on market potential and customer needs, leveraging existing client relationships for quicker market entry [3] - The company aims to maintain traditional business while rapidly developing new business areas [3] Group 5: Future Projections and Policies - The smart card business is projected to continue growing rapidly over the next 1-2 years [4] - The company maintains a stable cash dividend policy, consistently rewarding shareholders [6] - The blockchain business has not developed significantly due to limited market capacity in the electronic ticketing sector [5]

Core Viewpoint - Donggang Co., Ltd. is actively engaging with investors to showcase its transition from traditional printing to information services, emphasizing its focus on data security and AI technology development. Group 1: Company Overview - Donggang Co., Ltd. hosted an investor event on May 21, 2025, where key executives presented the company's products and business model [1] - The company has shifted its primary business focus from printing to providing services related to the information industry, including electronic tickets and AI technology [3] Group 2: Data Security Measures - The company prioritizes data security by implementing hardware controls such as internal server storage and physical isolation from external networks, along with certifications for information security systems [2] - Customer data is transmitted securely using dedicated lines, ensuring compliance with data protection requirements [2] Group 3: Business Transition and AI Development - The transition to an information service provider aligns with the company's long-standing focus on the information industry, which has evolved to include AI technology and related products [3][4] - The AI technical team comprises talent from various backgrounds, including experience from electronic invoicing and lottery machine development [4] Group 4: Business Impact and Growth Prospects - The company reports minimal exposure to export tariffs due to limited export activities, indicating that current operations are not directly affected by such policies [4] - New business segments, including document storage, smart cards, and AI robotics, are expected to maintain a positive growth trend in the coming years [4] Group 5: Financial Health and Management - The company has a strong customer base, including financial institutions and government entities, resulting in low bad debt rates and minimal accounts receivable pressure, with only 47,900 yuan written off in 2024 [5] - A decline in gross margin in 2024 is attributed to increased market competition leading to price reductions [6] - The company is implementing cash management strategies to enhance fund efficiency through investments in bank financial products [6]