Investment Rating - The report assigns a "Buy" rating to the company with a target price of 22.75 CNY over the next six months, based on a current price of 18.51 CNY [1]. Core Insights - The company is a leader in LNG and air separation equipment, benefiting from a high industry boom. It is actively exploring hydrogen energy applications and expanding its gas operation business, which opens up growth opportunities [6][8]. Summary by Sections 1. Company Overview - The company, originally named Deep Cold Co., was established in 2001 and focuses on gas purification, separation, and low-temperature liquefaction technologies. It has shifted towards high-end equipment manufacturing and is expanding into gas investment and clean energy operations [14][17]. 2. Financial Performance - The company is expected to achieve revenues of 861.51 million CNY in 2024, with a growth rate of 28.9%. By 2027, revenues are projected to reach 1.31 billion CNY, with a compound annual growth rate of 16% for net profit [3][4][6]. - In 2024, the company is projected to achieve a net profit of 72.37 million CNY, reflecting a significant growth of 121.67% compared to the previous year [3][4]. 3. LNG and Air Separation Equipment - The company is a leading player in the LNG and air separation equipment market, with a projected market size of 533 billion CNY by 2025. The company has the capability to design and manufacture LNG processing plants with a daily capacity of 10 million cubic meters [6][35][56]. - In 2024, LNG equipment is expected to generate 6.1 billion CNY in revenue, accounting for over 70% of total revenue [24][26]. 4. Hydrogen Energy Business - The hydrogen energy sector is rapidly developing, with a projected production of 3.815 million tons in 2024, growing by 3.5%. The company has established a joint venture with Toyota to enter the hydrogen fuel cell market [71][88]. - The company is actively involved in the entire hydrogen energy value chain, including hydrogen production, storage, and application, leveraging resources from its parent group [83][87]. 5. Gas Operation Expansion - The company is expanding its gas operation business, with revenues from gas operations expected to grow significantly in the coming years. In 2023, revenues from gas operations were 2.76 million CNY, with projections of 12.46 million CNY in 2024 [6][19][26]. - The company is pursuing strategic acquisitions and investments in gas operation projects to enhance its operational scale [6][19].

Core Viewpoint - The company, Hangzhou Fostar Deep Cold Equipment Co., Ltd., has reported significant growth in its financial performance for the first half of 2025, with a focus on enhancing operational quality and shareholder returns through strategic initiatives and governance changes [3][55]. Company Overview - The company is engaged in the manufacturing of deep cold equipment and aims to become a leading provider of air separation and LNG equipment [55]. - The company has a vision to be recognized as the most trusted and competitive manufacturer in its field, with a mission to provide comprehensive solutions for various industrial gas needs [55]. Financial Performance - For the first half of 2025, the company achieved a revenue of 1,475.65 million yuan, representing a year-on-year increase of 62.14% [56]. - The net profit attributable to shareholders was 251.21 million yuan, marking a 140.45% increase compared to the previous year [56]. - The overall gross margin improved to 27.23%, an increase of 5.28 percentage points year-on-year [56]. Strategic Initiatives - The company has implemented a "Quality Improvement and Efficiency Enhancement" action plan to drive high-quality development and protect investor interests [55]. - It has successfully expanded its international market presence, covering over 70 countries and regions, and has established strategic partnerships with major gas companies [56]. - The company is focusing on high-return gas operation projects to build a second growth curve amid challenges in the industrial gas market [57]. Governance Changes - The company has decided to cancel its supervisory board and amend its articles of association in compliance with new regulations, with the audit committee taking over the supervisory responsibilities [69]. - The company plans to enhance its governance structure by adding a worker representative director to the board, increasing the total number of directors [70]. Fund Management - The company raised 746 million yuan through its initial public offering, with a net amount of 658.89 million yuan after deducting issuance costs [39]. - As of June 30, 2025, the company has invested 428.45 million yuan of the raised funds into projects, with a focus on ensuring compliance with fund management regulations [40][51]. Innovation and R&D - The company emphasizes innovation in deep cold technology, with ongoing projects aimed at enhancing product quality and operational efficiency [62]. - It has filed two new invention patents related to intelligent monitoring methods for air separation devices, reflecting its commitment to technological advancement [63]. Shareholder Returns - The company prioritizes cash dividends for shareholder returns, having distributed a total of 79.21 million yuan in cash dividends for the 2024 fiscal year, which is 30.33% of its net profit [61].

Core Viewpoint - The company has terminated the acquisition of Henan Keyi Gas Co., Ltd., which will not adversely affect its operational performance or financial status [3]. Group 1: Acquisition Details - The company announced the termination of the share acquisition agreement, which releases both parties from any obligations under the previous intention agreement [2]. - The initial plan was to acquire 65.43% of Henan Keyi, a company specializing in industrial gas production and sales, with a registered capital of 91.6785 million yuan [3]. - Henan Keyi's 2023 revenue was 227 million yuan, with a net profit of 24.4581 million yuan, and for the first half of 2024, it reported revenue of 90.9285 million yuan and a net profit of 8.0745 million yuan [3]. Group 2: Strategic Implications - The acquisition was aligned with the company's "14th Five-Year" strategic development plan, aimed at expanding into the industrial gas investment and operation sector [4]. - The company has a strong focus on cryogenic equipment manufacturing and aims to leverage this to enhance its capabilities in industrial gas production [4]. - The termination of the acquisition was due to a failure to reach consensus on key terms after extensive negotiations and due diligence [4]. Group 3: Financial Performance - In 2024, the company reported a revenue increase and a net profit of 72.3668 million yuan, representing a year-on-year growth of 121.67% [5]. - The growth was attributed to a significant increase in both existing and new orders, as well as effective collection of accounts receivable [5]. - The company plans to continue focusing on long-term development, actively pursuing market opportunities, and expanding into clean energy and industrial gas investment operations [5].