Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company continues to enhance its core competitiveness, with significant technological advantages in the aerospace forging sector [1] - The performance in the first half of 2025 showed a decline in revenue and net profit, primarily due to cyclical adjustments in the industry and fluctuations in customer demand [8] - The company is expected to see a recovery in demand in the second half of the year, supported by its strategic focus on next-generation military aircraft and engine forgings [8] Financial Performance Summary - For the first half of 2025, the company reported total revenue of 785 million yuan, a year-on-year decrease of 24.80%, and a net profit attributable to shareholders of 270 million yuan, down 17.47% from the previous year [1][8] - The gross profit margin improved to 34.5% from approximately 31% in the same period last year, driven by a higher proportion of high-value titanium alloy forgings and a decrease in raw material costs [8] - The company’s operating cash flow showed a net outflow of 262 million yuan, indicating ongoing operational pressures [8] Earnings Forecast and Valuation - The earnings forecast for the company has been adjusted, with net profits expected to be 459 million yuan, 571 million yuan, and 596 million yuan for 2025, 2026, and 2027 respectively [8] - The corresponding price-to-earnings (P/E) ratios are projected to be 32, 25, and 24 times for the same years [8] - The company’s financial structure remains robust, with a debt-to-asset ratio of 31.15% and a current ratio of 3.73, indicating a safe financial position [8]

Group 1 - The number of "specialized, refined, distinctive, and innovative" small giant enterprises in Baoji City, Shaanxi Province has rapidly increased, showcasing a wide industry distribution, strong innovation capabilities, and excellent market performance [1][2] - Baoji Tianlian Huitong Composite Materials Co., Ltd. is a national-level small giant enterprise producing high-pressure flexible composite pipes, which are widely used in water injection, oil, and gas transportation, offering a cost saving of one-third compared to metal pipes [1] - The company has received orders from countries such as Iraq and Egypt, with export business accounting for nearly 25% of total revenue [1] - Baoji Yongshengtai Titanium Industry Co., Ltd. is another national-level small giant enterprise that integrates R&D, smelting, forging, and processing of titanium and titanium alloys, with products widely used in aviation, petrochemicals, and medical fields [1] - The export business of Yongshengtai once reached 60%, and the company is transitioning from producing mainly upstream titanium alloy forgings and plates to a more automated and intelligent production of diverse small batches [1] Group 2 - Baoji City currently has 33 national-level specialized small giant enterprises and over 200 provincial-level specialized small and medium-sized enterprises, becoming a new driving force for high-quality industrial economic development in the city [2]