Core Viewpoint - The recent financial report of航发动力 (600893) indicates a significant decline in revenue and net profit for the first half of 2025 compared to the previous year, raising concerns about the company's financial health and operational efficiency [1]. Financial Performance - Total revenue for the first half of 2025 was 14.098 billion yuan, a decrease of 23.99% year-on-year [1]. - The net profit attributable to shareholders was 91.78 million yuan, down 84.57% from the previous year [1]. - In Q2 2025, total revenue was 7.934 billion yuan, reflecting a 35.37% decline year-on-year, with net profit at 84.27 million yuan, a drop of 80.84% [1]. - The company's gross margin was 10.96%, an increase of 5.42% year-on-year, while the net margin fell to 1.07%, down 69.86% [1]. - Total operating expenses (selling, administrative, and financial) amounted to 1.073 billion yuan, representing 7.61% of revenue, an increase of 45.52% year-on-year [1]. Balance Sheet and Cash Flow - Cash and cash equivalents decreased by 48.94% to 2.864 billion yuan [1]. - Accounts receivable rose by 34.91% to 38.377 billion yuan, indicating potential liquidity issues [1]. - Interest-bearing liabilities increased by 46.36% to 19.313 billion yuan [1]. - The company reported a negative operating cash flow per share of -3.44 yuan, an improvement of 11.63% year-on-year [1]. Business Model and Operational Efficiency - The company's return on invested capital (ROIC) was 2.43% last year, indicating weak capital returns [2]. - The average net profit margin over the past year was 2.05%, suggesting low added value in products or services [2]. - Historical data shows that the company has had two years of losses since its IPO, reflecting a fragile business model [1][2]. Market Sentiment and Analyst Expectations - Analysts project a net profit of 629 million yuan for 2025, with an average earnings per share of 0.23 yuan [3]. - Several funds have increased their holdings in航发动力, indicating a potential positive sentiment in the market despite the recent financial struggles [4].