Meeting Overview - The company held a performance briefing for the fiscal year 2024 and the first quarter of 2025 on May 27, 2025, via the Shanghai Stock Exchange's online platform [1] - Key executives, including the General Manager and Financial Director, participated in the meeting to address investor inquiries [1] Financial Performance - The company reported a significant increase in revenue for the first quarter, particularly in the aircraft ground support equipment and process equipment sectors [1] - R&D expenses for 2024 were approximately 19.81 million yuan, accounting for 6.83% of revenue, remaining stable compared to the previous year [1][2] Order and Delivery Status - The company confirmed that current production orders and delivery schedules are normal, with no significant changes reported [2] - The company is actively working on integrating artificial intelligence into existing products to drive future growth [2] Strategic Initiatives - The company is focused on improving its business structure and expanding into civilian markets while solidifying its military product base [3] - Plans are in place to enhance operational management and efficiency through refined internal controls and cost reduction strategies [3] Challenges and Responses - The company acknowledged the impact of market conditions on product pricing and profitability, emphasizing its strong R&D capabilities and proprietary technologies [4] - The company is committed to addressing performance issues and has set annual operational goals, which are currently on track [3][4]

Core Viewpoint - Despite a year-on-year revenue increase, *ST Lihang's 2024 revenue remains below 300 million yuan, and the company continues to operate at a loss, leading to a delisting risk warning for its stock [2][4]. Revenue and Profitability - In 2024, *ST Lihang achieved a revenue of 290 million yuan, a year-on-year increase of 23.54%, but reported a net loss of 94 million yuan, a decline of 37.51% compared to the previous year [4]. - The company's gross profit margin has significantly decreased, with 2023 and 2024 gross profit margins at 13.82% and 6.21%, respectively, and net profit margins at -29.12% and -32.96% [5]. Cost Structure and Sales - The increase in revenue was accompanied by a more than 30% rise in operating costs, attributed to a shift in product sales structure towards lower-margin non-standard products [2][5]. - The company reported that the sales of high-margin products decreased compared to the previous year, contributing to the overall decline in profitability [5]. Inventory and Financial Management - As of the end of 2024, *ST Lihang's inventory value increased by 39.66% to 220 million yuan, marking four consecutive years of inventory growth [6][7]. - The accounts payable also rose by 66.26% due to increased orders and corresponding procurement [7]. Financial Costs - Financial expenses surged by 394.32% to 1.559 million yuan in 2024, primarily due to increased interest on working capital loans [8].

Core Viewpoint - The investigation of Liu Suiyang, the founder and chairman of Lihang Technology, due to serious job-related crimes, has triggered a significant decline in the company's stock price and raised concerns about its financial stability and governance issues [1][2][3]. Group 1: Company Overview - Lihang Technology, founded in 2003 by Liu Suiyang, specializes in high-end aviation manufacturing, providing ground support equipment and testing devices for aircraft, with major clients including AVIC and COMAC [2]. - The company went public on the Shanghai Stock Exchange in 2022 and has been recognized as a benchmark enterprise in the aviation manufacturing sector in Southwest China [2]. Group 2: Financial Performance - Lihang Technology has reported continuous financial deterioration since its IPO, with a loss of 68.31 million yuan in 2023 and an expected loss of 68 to 94 million yuan in 2024 [3]. - The company's revenue for 2024 is projected to be between 273 million and 293 million yuan, but its core business revenue is expected to fall below the 300 million yuan threshold after excluding non-core operations [3]. - The company's stock may face delisting risk due to failing to meet financial performance standards, with a warning expected after the annual report is released on April 26 [3]. Group 3: Governance and Management Issues - The investigation into Liu Suiyang raises significant governance concerns, as he is a key figure in the company and has been accused of corruption and dereliction of duty [2]. - The company's management instability and declining profit margins due to intensified price competition in the military industry have further strained its operational capabilities [3]. Group 4: Market Reaction - Following the announcement of the investigation, Lihang Technology's stock price fell sharply, with a nearly 25% market value loss by March 24 [1]. - Investor sentiment has deteriorated, with significant sell-offs observed in the secondary market, indicating a lack of confidence in the company's future [4]. Group 5: Industry Context - Lihang Technology's situation reflects broader challenges faced by specialized and innovative enterprises in China, which have encountered governance weaknesses and cyclical industry fluctuations post-IPO [5]. - The company must stabilize its management structure and divest inefficient assets to improve profitability while transitioning towards higher value-added sectors such as intelligent and digital aviation equipment [6].