Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative return of over 20% within the next six months [6][17]. Core Views - The company achieved a revenue of 991 million yuan in the first half of 2025, representing an 8.09% year-on-year growth, with a net profit attributable to shareholders of 117 million yuan, up 14.18% year-on-year [1]. - The report expresses optimism for the second half of 2025, driven by a recovery in demand and the company's focus on emerging industries and technological development [4]. Financial Performance Summary - **H1 2025 Performance**: Revenue was 991 million yuan, with a gross margin of 41.88% and a net margin of 13.51%. The expense ratios for sales, management, R&D, and finance were 7.35%, 11.49%, 8.18%, and 1.55%, respectively [1]. - **Q2 2025 Performance**: Revenue reached 561 million yuan, showing an 18.39% year-on-year increase and a 30.78% quarter-on-quarter increase. The net profit was 76.37 million yuan, up 26.14% year-on-year and 86.68% quarter-on-quarter [2]. - **Segment Performance**: - Testing equipment revenue was 310 million yuan, with a gross margin of 26.56% [3]. - Environmental testing revenue was 487 million yuan, with a gross margin of 54.95% [3]. - Integrated circuit segment revenue was 155 million yuan, with a gross margin of 36.49% [3]. Future Earnings Forecast - The company forecasts net profits of 298 million yuan, 355 million yuan, and 423 million yuan for 2025, 2026, and 2027, respectively, with growth rates of 30%, 19%, and 19% [4]. - The expected price-to-earnings ratios for 2025, 2026, and 2027 are 28, 24, and 20 times, respectively [4]. Basic Data - The total share capital is 508.55 million shares, with a total market value of 8.457 billion yuan [7]. - The current price is 16.63 yuan per share [6]. Industry Overview - The company operates in the social services/professional services sector, focusing on testing and experimental services, particularly in emerging industries such as new energy and aerospace [4].

Summary of Su Shi Testing Conference Call Company Overview - **Company**: Su Shi Testing - **Industry**: Testing and Inspection Services Key Financial Performance - **Revenue Growth**: 6.72% increase in H1 2025, reaching 999.1 million CNY [2][3] - **Net Profit**: 14.18% increase, totaling 117 million CNY [3] - **Integrated Circuit Revenue**: Grew by 21.01%, reaching 155 million CNY [2][3] - **Overall Gross Margin**: Decreased by 3.16% to 41.88% [2][3] - **Net Margin**: Increased by 0.27% to 13.51% [3] Segment Performance - **Environmental Testing Equipment**: Revenue of 310 million CNY, up 6.32% [3] - **Environmental Testing Services**: Revenue of 487 million CNY, up 5.75% [3] - **Integrated Circuit Segment**: Gross margin of 36.49%, down 6.38% [3] Strategic Insights - **Focus on Emerging Industries**: Plans to reduce investment in traditional sectors and increase focus on aerospace and commercial space [4][15] - **New Product Development**: Emphasis on R&D to counteract declining gross margins [6][19] - **Capacity Utilization**: Increased from 30% to over 70% in Shanghai [12] Market Trends and Opportunities - **Vacuum Testing Equipment Demand**: Strong demand with plans to achieve billion-level revenue [2][8][29] - **AI and High-Performance Chip Testing**: Significant growth in testing services, with AI chip clients accounting for nearly 10% of business [2][9] - **Third-Party Testing Demand**: Recovery observed, with orders increasing to over 15% [22][23] Challenges and Risks - **Price Pressure**: Increased competition leading to price pressures across all segments [6][19] - **Delivery Speed of Large Orders**: Need to monitor the delivery speed of large orders in H2 2025 [5][24] - **Impact of Policy Changes**: Restrictions on outsourcing may affect operational efficiency [32][39] Future Outlook - **Optimistic H2 2025**: Anticipated growth in equipment and testing service orders, with a focus on improving delivery speed [5][10] - **Capital Expenditure Trends**: Expected to remain stable with a slight decrease, focusing on emerging sectors [16][18] - **Long-Term Growth in Special Industries**: Positive outlook for special industries over the next few years [36] Conclusion - Su Shi Testing is positioned for growth in emerging sectors, particularly in aerospace and AI chip testing, while facing challenges from price competition and policy restrictions. The company is actively working on improving operational efficiency and expanding its market presence.

Financial Performance - The company's revenue for the first half of 2025 reached 99,085.24 million yuan, representing a year-on-year growth of 8.09% [2] - Net profit attributable to shareholders was 11,728.42 million yuan, up 14.18% year-on-year [2] - Net profit after deducting non-recurring gains and losses was 11,425.18 million yuan, reflecting a growth of 20.72% [3] Revenue Breakdown by Segment - Revenue from testing equipment was 30,979.98 million yuan, a year-on-year increase of 6.32% [3] - Revenue from environmental and reliability testing services was 48,742.55 million yuan, growing by 5.75% [3] - Revenue from integrated circuit verification and analysis services was 15,485.74 million yuan, with a year-on-year growth of 21.01% [3] Profit Margins - Gross margin for testing equipment was 26.56%, down 4.66% year-on-year [3] - Gross margin for environmental and reliability testing services was 54.95%, a decrease of 0.79% [3] - Gross margin for integrated circuit verification and analysis services was 36.49%, down 6.38% year-on-year [3] Strategic Focus and Market Outlook - The company is committed to focusing on core business areas, driving dual engines of growth, and integrating manufacturing with services [3] - There is an optimistic outlook for the second half of the year, driven by strong demand in the testing equipment and services sectors [4] - The company plans to enhance technical research and expand testing capabilities while implementing cost reduction and efficiency improvement strategies [4] Challenges and Industry Trends - The company faces pressure on profit margins due to intensified market competition and cost pressures from expanded capacity [4] - The testing and inspection industry is experiencing a trend towards specialization, centralization, and scale, with resources concentrating on companies with technical and management advantages [7] - The demand from third-party testing institutions for equipment procurement has slightly increased, while the demand for new energy vehicles has stabilized [8] Capital Expenditure Plans - Capital expenditure is expected to remain stable, focusing on emerging industries such as aerospace, integrated circuits, and intelligent robotics [9] - The company aims to enhance its technical reserve capabilities and expand testing capabilities in the service sector [9]