Core Viewpoint - The company reported significant growth in revenue and profit for Q3, driven by strong demand in the infrared imaging and optoelectronic sectors, indicating a positive outlook for future development [1][2]. Financial Performance - Q3 revenue reached 1.542 billion yuan, a year-over-year increase of 36.70% and a quarter-over-quarter increase of 9.59% [1]. - Net profit attributable to shareholders for Q3 was 356 million yuan, up 37.33% year-over-year and 73.38% quarter-over-quarter [1]. - For the first three quarters of 2025, revenue totaled 4.086 billion yuan, reflecting a year-over-year growth of 29.72%, with net profit at 707 million yuan, up 46.21% year-over-year [1]. Profitability and Cost Management - The overall gross margin for the first three quarters was 51.97%, an increase of 0.85 percentage points compared to the same period last year [2]. - The expense ratio for the first three quarters was 31.09%, a decrease of 1.63 percentage points year-over-year, indicating improved cost management [2]. Research and Development - R&D investment for the first three quarters was 812 million yuan, a year-over-year increase of 41.19%, with an R&D expense ratio of 19.88% [3]. - The company is focusing on AI applications across various business areas, achieving significant progress in chip design and terminal products [3]. Market Expansion and Product Development - The company has made notable advancements in the automotive sector, with a comprehensive product system for vehicle-mounted infrared thermal imaging and successful certification upgrades [3]. - Multiple projects with leading enterprises in the automotive sector have been secured, with several vehicle models already launched or set to launch [3]. Profit Forecast and Valuation - The company's net profit forecasts for 2025-2027 have been raised by 9.27%, 8.79%, and 12.03%, respectively, with a compound annual growth rate of 38.13% [4]. - The target price has been adjusted to 131.07 yuan, based on a price-to-earnings ratio of 51 for 2026 [4].

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 118.32 [1][5][7] Core Insights - The company reported a strong performance in H1 2025, achieving revenue of RMB 25.44 billion, a year-on-year increase of 25.82%, and a net profit attributable to shareholders of RMB 3.51 billion, up 56.46% year-on-year [1] - The infrared thermal imaging and optoelectronic business segments showed significant growth, with revenues of RMB 24.03 billion, a 36.56% increase year-on-year, driven by strong downstream demand [2] - The company is actively expanding its AI-related applications across various business areas, achieving significant progress in chip design and terminal products [4] Financial Performance - In Q2 2025, the company achieved revenue of RMB 14.07 billion, representing a year-on-year growth of 38.67% and a quarter-on-quarter increase of 23.82% [1] - The gross margin for the infrared thermal imaging and optoelectronic business was 52.94%, slightly down by 0.61 percentage points year-on-year [2] - The company’s cash flow improved significantly, reaching RMB 3.18 billion in H1 2025, an increase of 328.46% year-on-year [2] Business Development - The company is making steady progress in special equipment and microwave business areas, with ongoing projects in smart guidance and optoelectronic pods [3] - The microwave business is expanding, with successful client integrations and stable deliveries of aerospace-grade components [3] - The company is also advancing its research projects, including next-generation intelligent low-cost uncooled infrared chips [3] Profit Forecast and Valuation - The company’s projected net profits for 2025-2027 are RMB 8.02 billion, RMB 10.86 billion, and RMB 13.38 billion respectively, with corresponding EPS of RMB 1.74, RMB 2.36, and RMB 2.91 [5][9] - The target price has been adjusted to RMB 118.32, based on a PE valuation of 68 times for 2025 [5][9]