Investment Rating - The report maintains a "Recommendation" rating for the company, indicating an expectation to outperform the benchmark index by 10%-20% over the next six months [21]. Core Insights - The company reported a significant year-on-year revenue increase of 30.17% to 9.639 billion yuan and a net profit growth of 93.70% to 758 million yuan for the first three quarters of 2025 [1]. - The traditional business is experiencing high prosperity, with the machinery business showing a revenue increase of 73% and net profit growth of 140% in the first half of the year [2]. - The emerging aviation power business is expected to benefit from the booming low-altitude economy and strategic partnerships, enhancing its competitive edge [6]. Financial Performance Summary - For Q3 2025, the company achieved a record high quarterly performance, with revenues of 2.946 billion yuan, marking a 13.68% year-on-year increase [1]. - The investment income for the first three quarters was 116 million yuan, primarily from the investment in Longxin General [1]. - The company’s earnings per share (EPS) are projected to be 0.83 yuan, 0.95 yuan, and 1.10 yuan for 2025, 2026, and 2027 respectively, with corresponding price-to-earnings (PE) ratios of 28, 25, and 21 [7]. Business Outlook - The company is positioned in a high-growth phase for both traditional and emerging businesses, with expectations for continued strong performance in the machinery sector and significant potential in the aviation power segment [2][6]. - The strategic acquisition and integration with Longxin General are anticipated to create synergistic effects, enhancing market competitiveness [2]. - The company is also focusing on the development of new energy and storage systems, which are expected to present strategic opportunities [6].

Core Viewpoint - In Q2 2025, Zongshen Power achieved a net profit of 279 million yuan, representing a year-on-year growth of 73% [2][9] - For H1 2025, the company reported revenue of 6.693 billion yuan, up 39.05% year-on-year, and a net profit of 506 million yuan, up 79.37% year-on-year [2][9] Financial Performance - In Q2 2025, the company recorded revenue of 3.450 billion yuan, a year-on-year increase of 39.00% and a quarter-on-quarter increase of 6.40% [2][9] - The gross profit margin for Q2 2025 was 15.6%, down 0.7 percentage points year-on-year but up 1.9 percentage points quarter-on-quarter [4][15] - The net profit margin for Q2 2025 was 8.2%, up 1.2 percentage points year-on-year and up 1.0 percentage points quarter-on-quarter [4][15] Business Segments - The company focuses on traditional core businesses, particularly in "general machinery" and "motorcycle engines," solidifying its leading position in niche markets [6][49] - In emerging sectors, Zongshen Power is actively investing in "aviation power," "new energy," and "high-end components," increasing R&D and market expansion efforts [6][49] - The company has developed a product line centered on small and medium-sized aviation piston engines, establishing five major aviation power platforms and launching over 20 derivative products [6][34] Low-altitude Economy - Zongshen Aviation has successfully developed the CA500 aviation piston engine, which is set to become the first domestic aviation power product to meet CAAC and ASTM F2339 standards [6][35] - The company is accelerating the certification process for its products and developing hybrid aviation engines to support widespread application in the low-altitude economy [6][35] General Machinery Business - Zongshen's general machinery business achieved total revenue of 3.647 billion yuan in H1 2025, a year-on-year increase of 73.06%, with a net profit of 370 million yuan, up 139.79% [28][49] - The company has strengthened its market position through technological advancements and resource synergies, particularly in the fields of stationary power generation and emergency power supply [28][49] Motorcycle Engine Business - The motorcycle engine segment reported revenue of 2.330 billion yuan in H1 2025, a year-on-year increase of 14.39%, with a net profit of 133 million yuan, up 39.30% [30][49] - The company is focusing on market expansion in emerging markets such as Mexico, Brazil, and West Africa, while enhancing its technological capabilities [30][49] New Energy Business - Zongshen Power has established a dual-driven strategy in the new energy sector, focusing on electric drive systems, energy storage, and hydrogen energy [40][44] - The electric drive system business is advancing in various applications, including special vehicles and electric motorcycles, with significant market breakthroughs [42][44] - The energy storage segment is expanding its product offerings and has initiated global expansion efforts, including establishing a subsidiary in Germany [43][44]

Investment Rating - The report maintains an "Outperform the Market" rating for the company [6][4]. Core Insights - The company achieved a net profit of 279 million yuan in Q2 2025, representing a year-on-year growth of 73% [1][9]. - For the first half of 2025, the company reported revenues of 6.693 billion yuan, up 39.05% year-on-year, and a net profit of 506 million yuan, up 79.37% year-on-year [1][9]. - The company is actively expanding into the low-altitude economy, focusing on aviation power, new energy, and high-end components as strategic emerging fields [3][58]. Financial Performance - In Q2 2025, the company achieved a revenue of 3.450 billion yuan, a year-on-year increase of 39% and a quarter-on-quarter increase of 6.4% [1][9]. - The gross profit margin for Q2 2025 was 15.6%, a decrease of 0.7 percentage points year-on-year but an increase of 1.9 percentage points quarter-on-quarter [2][11]. - The net profit margin improved by 1.2 percentage points year-on-year to 8.2% in Q2 2025 [2][11]. Business Segments - The company's general machinery segment generated 3.644 billion yuan in revenue in H1 2025, a year-on-year increase of 73.09% [1][9]. - The motorcycle engine segment reported revenue of 2.324 billion yuan in H1 2025, a year-on-year increase of 14.23% [1][9]. - The aviation power segment has developed a product line focused on small and medium-sized aviation piston engines, with over 20 derivative products launched [3][39]. Future Projections - The company has revised its revenue forecasts for 2025-2027 to 13.41 billion, 16.13 billion, and 18.73 billion yuan, respectively, reflecting an increase from previous estimates [4][58]. - The projected net profits for the same period are 1.007 billion, 1.187 billion, and 1.369 billion yuan, respectively, also revised upwards [4][58]. Strategic Focus - The company is committed to enhancing its core business in general machinery and motorcycle engines while expanding into new fields such as aviation power and new energy [58][56]. - The company aims to leverage its strong order book and continuous growth in its core businesses to drive future performance [4][58].

Summary of Longxin General's Conference Call Company Overview - Longxin General is deeply engaged in the motorcycle industry, maintaining a strong foothold in the low-end market while rapidly growing in the high-end market, particularly with its Wujie brand in the large-displacement motorcycle segment [2][4][20]. Key Points and Arguments Market Performance - Domestic sales of large-displacement motorcycles have seen over 20% year-on-year growth, with exports expected to increase by over 50% this year [2][4]. - The overall motorcycle business revenue reached approximately 12.6 billion yuan in 2024, marking a 34% year-on-year increase [4][20]. - In the first half of 2025, revenue grew nearly 25%, with profits approaching 1 billion yuan, reflecting over 80% year-on-year growth [4][24]. Brand Development - The Wujie brand, launched in 2019, focuses on mid-to-high-end leisure motorcycles and has seen significant sales growth, with exports of about 80,000 units last year [2][6]. - The introduction of popular models like the 525 has enhanced brand reputation, competing with high-end brands such as Chuanfeng and Qianjiang [2][6]. International Cooperation - Longxin General has partnered with BMW since 2005, which has significantly enhanced its capabilities in manufacturing large-displacement engines and complete vehicles [7]. Market Trends - The domestic fuel motorcycle market is declining, but the large-displacement segment is experiencing robust growth, driven by expanding domestic demand and export opportunities [10][11]. - The penetration rate of large-displacement motorcycles in China is still low, at around 10%, compared to over 20% in some developing countries, indicating substantial growth potential [12][16]. Competitive Landscape - The concentration of the domestic large-displacement motorcycle market is increasing, with the CR2 reaching approximately 60% in the first half of 2025 [13]. - Consumers prioritize brand strength, powertrain technology, vehicle design, and marketing channels when purchasing large-displacement motorcycles [14]. Additional Important Insights - Longxin General plans to expand its product matrix and strengthen its overseas market presence, with new models set to launch by the end of 2025 [21]. - The company aims to increase its market share in Europe, particularly in Spain and Italy, where it has already made significant inroads [22][18]. - Future revenue projections indicate that motorcycle business revenues will reach 15 billion, 18 billion, and 21 billion yuan from 2025 to 2027, with a growth rate of about 20% annually [25]. Financial Outlook - Longxin General's profit is expected to reach 1.8 to 1.9 billion yuan in 2025, with a projected increase to 2.2 to 2.3 billion yuan in 2026 [26]. - The company is seen as a quality investment with both growth and dividend potential, maintaining a recommended rating [26][27].

Core Viewpoint - The visit of the Kazakhstan economic and trade delegation to Chongqing aims to explore new pathways for practical economic and trade cooperation between Chongqing and Kazakhstan, focusing on the Western Land-Sea New Corridor and the Yumaotong digital trade platform [1] Group 1: Economic Cooperation - The Kazakhstan delegation engaged in a series of economic and trade exchange activities in Chongqing, highlighting the importance of bilateral cooperation [1] - The delegation visited the Yumaotong digital trade platform exhibition hall to gain insights into Chongqing's current economic development and trade capabilities [1] Group 2: Product Showcase - The delegation observed the "Chongqing-made" and "Global Purchase" product displays, which included six major industry categories such as large-scale production materials, food, agricultural products, and machinery [1] - The exhibition provided an opportunity for the delegation to learn about the "Chongqing vehicles going abroad" initiative and other significant trade products [1]