Core Viewpoint - The company reported a significant decline in revenue and net profit for the first half of 2025, indicating ongoing challenges in its core business despite some improvements in profitability metrics [3][4]. Financial Performance - In H1 2025, the company achieved revenue of 410 million, a year-on-year decrease of 34.0%, and a net profit attributable to shareholders of 17 million, down 79.9% [3]. - Q2 2025 saw revenue of 220 million, a 42.0% year-on-year decline, with a net profit of 11 million, down 74.9% year-on-year but up 100.3% quarter-on-quarter [3][4]. - The comprehensive gross margin for H1 2025 was 38.5%, an increase of 3.5 percentage points year-on-year, while the net profit margin was 4.1%, a decrease of 9.4 percentage points year-on-year [4]. Product Performance - Revenue from mining rubber wear parts in H1 2025 was 290 million, down 2.6%, with a gross margin of 40.3%, a decrease of 2.2 percentage points [5]. - Revenue from mineral processing equipment was 40 million, down 9.0%, with a gross margin of 27.1%, a decrease of 5.3 percentage points [5]. - Revenue from mining pipelines increased by 5.3% to 20 million, with a gross margin of 39.3%, down 12.4 percentage points [5]. - Revenue from mining metal equipment was 60 million, down 2.6%, with a gross margin of 37.5%, an increase of 11.8 percentage points [5]. - The mineral processing system solutions and services business saw a 100% decline in revenue, down from 200 million in H1 2024 [5]. Regional Performance - Domestic revenue in H1 2025 was 190 million, down 4.9%, with a gross margin of 31.6%, an increase of 1.4 percentage points [5]. - International revenue was 230 million, down 47.3%, with a gross margin of 44.1%, an increase of 7.0 percentage points [5]. Future Outlook - The company is steadily advancing its overseas production base construction, with five bases established in Mongolia, Zambia (92% complete), Chile (80% complete), Peru (48% complete), and a base in Serbia under development [6]. - The total production capacity is expected to reach 3 billion, with a focus on developing markets in Latin America and Africa, indicating potential for growth in international operations [7].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [6]. Core Views - The company experienced a significant decline in revenue and net profit in the first half of 2025, with revenue dropping by 34.0% year-on-year to 410 million yuan and net profit decreasing by 79.9% to 17 million yuan [1]. - The decline in revenue is primarily attributed to a substantial reduction in EPC project income, although excluding this income, the revenue only decreased by 3.0% [2]. - The company is focusing on enhancing its overseas production capacity, with five overseas bases under construction, which is expected to support future growth [4]. - Profitability metrics show a mixed performance, with a gross margin increase to 38.5% but a net profit margin decline to 4.1% due to rising R&D and sales expenses [2]. Summary by Sections Financial Performance - In H1 2025, the company reported revenue of 410 million yuan, a 34.0% decrease year-on-year, and a net profit of 17 million yuan, down 79.9% [1]. - Q2 2025 figures show revenue of 220 million yuan, a 42.0% decline year-on-year, while net profit was 11 million yuan, down 74.9% [1]. - The comprehensive gross margin for H1 2025 was 38.5%, up 3.5 percentage points year-on-year, while the net profit margin fell by 9.4 percentage points [2]. Product and Regional Breakdown - Revenue from mining rubber wear parts was 290 million yuan, down 2.6% year-on-year, with a gross margin of 40.3% [3]. - The company achieved 40 million yuan in revenue from mineral processing equipment, a 9.0% decline, with a gross margin of 27.1% [3]. - Domestic revenue was 190 million yuan, down 4.9%, while international revenue was 230 million yuan, down 47.3% [3]. Capacity Expansion and Future Outlook - The company is progressing with its overseas production bases, aiming for a total capacity of 3 billion yuan, which is expected to enhance its market presence in regions like Latin America and Africa [4]. - The net profit forecasts for 2025-2027 have been adjusted downward by 33.4%, 20.8%, and 14.5%, respectively, reflecting lower expectations for mining machinery demand [4]. Valuation Metrics - The current stock price corresponds to a PE ratio of 48 for 2025, 32 for 2026, and 24 for 2027, indicating a favorable valuation outlook based on growth potential [4].

Core Viewpoint - The company's 1H25 performance fell short of market expectations, with significant declines in revenue and net profit due to various factors including project income recognition issues and increased depreciation costs [1][2]. Financial Performance - 1H25 revenue was 413 million, down 34.04% year-on-year; net profit attributable to shareholders was 17 million, corresponding to earnings per share of 0.10, down 79.85% year-on-year [1]. - In 2Q25, revenue was 219 million, down 42.0% year-on-year; net profit attributable to shareholders was 11 million, down 74.9% year-on-year [1]. - The gross margin for 1H25 was 37.3%, up 3.1 percentage points year-on-year, driven by high-margin products [2]. - The net margin for 1H25 was 4.1%, down 9.3 percentage points year-on-year, primarily due to increased depreciation, foreign exchange losses, and R&D expenses for new products [2]. Product Performance - Revenue from various products in 1H25 included: - Mining rubber wear parts: 290 million, down 2.58% - Mineral processing equipment: 43 million, down 8.99% - Mining pipelines: 15 million, up 5.32% - Mineral processing system solutions and services: 58 million, down 2.58% [1]. Development Trends - New product launch: The company introduced the second-generation rubber wear liner, receiving positive feedback from major clients, with expectations for increased revenue and margin in the second half of the year [3]. - Overseas factory ramp-up: The company’s factory in Zambia has commenced production, with potential for rapid client acquisition due to its location in a prime copper mining area [3]. Profit Forecast and Valuation - The company has revised down its profit forecasts for 2025 and 2026 by 48.9% and 17.0% to 83 million and 179 million, respectively [4]. - The current stock price corresponds to a P/E ratio of 53 for 2025 and 24 for 2026, with a target price maintained at 29, reflecting a potential upside of 11.8% [4].