Industry Overview - In the first half of 2025, the general equipment manufacturing industry is expected to reach a cyclical bottom recovery, characterized by "revenue stabilization and profit acceleration" [1] - The machinery sector saw a year-on-year revenue growth of 6.9% in Q2, with net profit growth of 14.3%, particularly driven by the instrumentation sector, which experienced a 2.2 percentage point increase in gross margin [1] Company Positioning - Zhejiang Lino (300838) is deeply integrated into the industry's recovery process, focusing on instrumentation and general equipment, which are core growth areas benefiting from industry demand [1] - The company is positioned in the control valve sector, benefiting from both "domestic substitution and overseas incremental" demand, as the competitive landscape is shifting towards leading companies with technological advantages [1] Market Dynamics - The demand for electric measuring instruments is recovering globally, with domestic manufacturers achieving double-digit revenue growth due to domestic substitution advantages [1] - The explosion in demand for oil and petrochemical equipment is a key driver, particularly as energy development accelerates in emerging markets like the Middle East [1] Policy Support - Policy benefits are categorized into national strategy, local support, and standard upgrades, with "smart control valves and high-efficiency energy-saving valves" listed as encouraged products [2] - The ongoing national equipment update initiative is driving demand in the maintenance market, positively impacting Zhejiang Lino's "product + service" transformation [2] Technological Advancements - The company has made significant strides in technology through strategic adjustments, including the acquisition of 100% of Xuzhou Huaji's shares, filling gaps in coal chemical and cryogenic conditions [2] - As of June 2025, the company and its subsidiaries have been granted 224 patents, with new products like pneumatic corrugated pipe control valves being widely applied in industrial fields [2] Market Expansion - The company is expanding its market presence in the Middle East by participating in key industry events, targeting high-end markets in oil, petrochemicals, and natural gas processing [3] - The domestic market is also seeing a shift towards service transformation, with subsidiaries providing maintenance services that enhance customer loyalty and reduce long-term costs [3] Digital Transformation - The implementation of the Selection Quotation 4.0 system has improved operational efficiency by quickly generating customized solutions through intelligent algorithms [3] - The company is advancing its headquarters-level information platform to streamline business processes and enhance resource allocation [3] Future Outlook - The company is expected to see performance improvements driven by multiple positive factors, including deepening domestic substitution and the implementation of equipment update policies [4] - The regional supply chain advantages and ongoing policy support are anticipated to lower procurement costs and enhance R&D capabilities [4] - The company's overseas market breakthroughs, particularly in the Middle East, are expected to convert customer resources into substantial orders, complementing its domestic strengths [4]

Core Viewpoint - Zhejiang Lino's half-year report for 2025 indicates strong revenue growth and a robust market position in the control valve industry, driven by dual demand in product and service sectors, particularly in the oil and petrochemical industries [1][2]. Group 1: Financial Performance - In the first half of 2025, Zhejiang Lino achieved a revenue of 406 million yuan, with significant contributions from the chemical industry (239 million yuan), pulp and paper industry (70.4 million yuan), and oil and petrochemical industry (40.3 million yuan) [1]. - The oil and petrochemical sector demonstrated exceptional resilience with a year-on-year revenue growth of 16.74% [1]. Group 2: Market Opportunities - The control valve industry is experiencing a dual demand opportunity from both product and service sides, driven by national industrial upgrades and the push for smart manufacturing [1][4]. - The increasing reliance on valves in the oil, petrochemical, and chemical industries is creating stable maintenance demands, transitioning from reactive to predictive maintenance strategies [1][4]. Group 3: R&D and Innovation - Zhejiang Lino's R&D investment reached 16.14 million yuan in the first half of 2025, maintaining a stable R&D expenditure ratio of over 3% from 2022 to 2024 [2]. - The company has a dedicated R&D team of 118 personnel, accounting for 13.33% of its workforce, and has been recognized as a national-level specialized and innovative "little giant" enterprise [2]. Group 4: Product Strategy - The company employs a dual strategy of new product development and optimization of existing products to meet market demands and enhance competitiveness [3]. - Notable products include the pneumatic corrugated pipe regulating valve and the soft-sealed fully welded ball valve, which have gained market recognition due to their unique technical advantages [3]. Group 5: Strategic Expansion - Zhejiang Lino is implementing a dual-driven strategy of "internal growth + external expansion" to navigate market challenges and enhance its competitive edge [4][5]. - The acquisition of Xu Huaji's 100% stake is a strategic move to strengthen its position in the regulating valve sector, leveraging Xu Huaji's advanced technology and market reputation [5][6]. Group 6: Future Outlook - Looking ahead to the second half of 2025, Zhejiang Lino aims to leverage Xu Huaji's expertise to expand into high-end application markets while maintaining its competitive advantage in traditional sectors [6]. - The company is focused on creating a comprehensive service solution that spans the entire lifecycle of its products, enhancing customer loyalty and reinforcing its position as a full-scenario application service provider in the control valve market [6].