Investment Rating - The report maintains an "Outperform" rating for the company with a target price of 33.40 RMB [1][6][10] Core Insights - The integration of digital intelligence business significantly enhances the company's profitability, with projected revenues for 2025-2027 at 8.91 billion, 9.69 billion, and 10.69 billion RMB, reflecting year-on-year growth of 147.73%, 8.83%, and 10.26% respectively [6][10] - The net profit attributable to shareholders is expected to reach 170 million, 238 million, and 292 million RMB for the same period, showing substantial growth of 1669.83%, 40.08%, and 22.67% [6][10] - The company's cash generation ability is rapidly recovering due to the expansion of standardized products in cybersecurity, cost control measures, and the merger with AsiaInfo Technologies [3][10] Financial Summary - In 2024, the company achieved a revenue of 3.60 billion RMB, a year-on-year increase of 123.56% [6][10] - The gross profit margin in 2024 was 51.61%, up 3.79 percentage points, primarily due to the increased revenue share from standardized products in cybersecurity [6][10] - The net profit attributable to shareholders in 2024 was 9.59 million RMB, with the cybersecurity segment reporting a loss of 90.68 million RMB, while the digital intelligence segment turned profitable at 100 million RMB [6][10] Product and Market Insights - The company's standardized product revenue grew by 7.4% year-on-year, accounting for 47.3% of the cybersecurity revenue, with a gross margin of 61.35%, an increase of 13.53 percentage points [3][10] - The HarmonyOS is expected to positively impact the company's terminal security business, which is a core product line, enhancing growth in both existing and new markets [6][10]

Group 1: Investor Relations Activity - The investor relations activity included a site visit and a phone conference discussing the "Important Military Facility Protection Regulations" [2][3] - Over twenty investment firms participated, both in-person and online, including major players like CITIC Securities and Huajin Securities [2] Group 2: Impact of the New Regulations - The "Important Military Facility Protection Regulations" legally define seven categories of critical military facilities, enhancing protection across the military supply chain [3] - The regulations create significant market opportunities in military informationization, equipment informationization, and security informationization [3] Group 3: Market Expansion and Technological Innovation - The regulations require electronic monitoring, identity verification, and access control for military facilities, driving demand for high-precision sensors and anti-jamming communication devices [4] - The emphasis on equipment effectiveness and emergency preparedness will promote the adoption of information management systems throughout the equipment lifecycle [5] Group 4: North Trust's Market Position - North Trust has a 16-year market share leadership in terminal data security, covering over 90% of military group units [7] - The military facility protection market is expected to reach a scale of hundreds of billions, with significant growth anticipated in 2025 as new projects align with the new regulations [7] Group 5: Competitive Advantages - North Trust's core advantages include a proprietary secure communication platform, strong integration capabilities with domestic hardware manufacturers, and comprehensive project experience [9][10] - The company is positioned to provide system-level solutions, differentiating itself from traditional security firms focused on hardware [10] Group 6: Technical Requirements of the New Regulations - The regulations mandate a multi-dimensional protection system, including electronic monitoring and identity verification, which differs fundamentally from traditional security approaches [11] - A proactive defense strategy is required, emphasizing early warning systems and cross-system collaboration for emergency responses [11] Group 7: Collaboration with Huawei - North Trust collaborates with Huawei across various domains, including information security and cloud computing, ensuring compatibility with Huawei's mainstream servers [12][13] - The company's products are designed to operate in diverse network environments, enhancing secure communication and data transmission capabilities [13]