Core Viewpoint - The report highlights the strategic transformation of the company, focusing on optimizing its product structure to enhance long-term competitiveness, despite facing revenue and profit declines in the first half of 2025 [1][3]. Financial Performance - In the first half of 2025, the company achieved revenue of 2.41 billion yuan, a slight decrease of 0.83% year-on-year, and a net profit attributable to shareholders of 312 million yuan, down 25.74% year-on-year [2][3]. - The decline in performance is attributed to price pressures in the new electronic components sector and an increase in the proportion of low-value-added products, alongside an 11.50% rise in operating costs due to raw material price increases [3][4]. Product and Market Dynamics - The revenue from new electronic components was 2.39 billion yuan, accounting for 99.01% of total revenue, which represents a 0.95% decrease year-on-year. The modern service industry revenue was 24 million yuan, showing a growth of 12.65% year-on-year [3]. - The core business areas, such as semiconductor discrete devices and general components, faced price pressures due to intensified industry competition, while high-value-added products like hybrid integrated circuits experienced revenue contraction due to fluctuating customer demand [3]. Profitability and Cash Flow - The company's gross margin for the first half of 2025 was 44.67%, a decrease of 6.12 percentage points year-on-year. The net cash flow from operating activities was 949 million yuan, down 20.30% year-on-year, primarily due to reduced sales receipts and increased procurement expenses [4]. - Contract liabilities increased by 64.53% year-on-year to 36 million yuan, indicating a robust order reserve, while inventory rose by 10.01% year-on-year to 2.47 billion yuan, mainly due to an increase in dispatched goods [4]. Competitive Advancements - The company made significant breakthroughs in core competitiveness, including the successful development of high-voltage radiation-resistant MOSFET products and advancements in hybrid integrated circuit technologies [4]. - During the reporting period, the company applied for 176 patents, including 80 invention patents, and now holds a total of 1,702 patents. The application of its key products has progressed in strategic emerging fields such as commercial aerospace, low-altitude economy, and new energy vehicles [4]. Investment Outlook - The company’s performance aligns with expectations, maintaining previous profit forecasts for 2025-2027, with projected net profits of 1.08 billion yuan, 1.25 billion yuan, and 1.45 billion yuan, respectively, corresponding to P/E ratios of 26, 22, and 19 times [5].

Core Insights - The company reported a decline in performance for the first half of 2025, with revenue decreasing by 0.83% year-on-year to 2.41 billion yuan and net profit attributable to shareholders dropping by 25.74% to 311.99 million yuan [1][2] Financial Performance - Revenue for the reporting period was 2,409,663,141.44 yuan, compared to 2,429,890,742.95 yuan in the same period last year, reflecting a decrease of 0.83% [1] - Net profit attributable to shareholders was 311,989,480.19 yuan, down from 420,136,657.70 yuan, marking a decline of 25.74% [1] - Net profit excluding non-recurring gains and losses was 281,354,587.38 yuan, a decrease of 24.10% from 370,699,678.18 yuan [1] - The net cash flow from operating activities was 948,854,598.40 yuan, down 20.30% from 1,190,592,304.14 yuan [1] - Basic and diluted earnings per share were both 0.5630 yuan, down 25.96% from 0.7604 yuan [1] - The weighted average return on equity was 2.09%, down from 2.90% [1] Asset and Equity Position - Total assets at the end of the reporting period were 18,338,976,370.88 yuan, an increase of 1.53% from 18,062,430,877.13 yuan at the end of the previous year [1] - Net assets attributable to shareholders were 14,980,968,495.80 yuan, up 1.57% from 14,749,329,513.19 yuan [1] Industry Developments - The company focuses on the electronic component industry ecosystem, emphasizing technological innovation and enhancing product quality [2] - In the semiconductor discrete device sector, the company achieved breakthroughs in high-voltage MOSFET products and improved thermal packaging design for ceramic surface-mounted devices [2] - In the electromechanical components sector, advancements were made in complex ceramic substrate design and induction brazing technology, enhancing key technical indicators for contactor products [2] - The company also developed technologies for stable output in high-pressure deep-sea environments and completed the development of high-energy density battery cells [2]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [5][36][42]. Core Insights - The company reported a revenue of 2.41 billion RMB for H1 2025, a slight decrease of 0.8% year-on-year, and a net profit attributable to shareholders of 312 million RMB, down 25.7% year-on-year. However, Q2 2025 showed a revenue increase of 6.1% year-on-year and a significant sequential growth of 65.3% [3][15][16]. - The company is experiencing a recovery in Q2, with net profit growth outpacing revenue growth, suggesting potential for high growth in the future [3][4]. - The gross margin for H1 2025 was 44.7%, down 6.1 percentage points year-on-year, while the net margin was 12.9%, down 4.3 percentage points year-on-year. In Q2 2025, the gross margin improved to 46.0%, with a net margin of 16.9%, indicating a positive trend in profitability [3][19]. Performance Analysis - The company faced downward price pressure from downstream sectors, which affected overall revenue. The increase in low-value-added products also contributed to the revenue decline [16]. - The company has shown significant improvement in Q2, with a net profit increase of 333.2% quarter-on-quarter, indicating a recovery trend [3][15]. - The company has actively increased inventory and contract liabilities, suggesting strong order support for future growth. As of Q2 2025, contract liabilities were 36.31 million RMB, up 19.23% from Q1 2025, and inventory reached 2.469 billion RMB, up 3.33% from Q1 2025 [4][28]. Technological Advancements - The company has made several technological breakthroughs, including the development of high-pressure radiation-resistant MOSFET products and advancements in key technologies for marine applications. These innovations are expected to enhance the company's competitive position in emerging sectors [4][24]. Profit Forecast and Valuation - The company is projected to achieve net profits of 1.1 billion RMB, 1.41 billion RMB, and 1.7 billion RMB for 2025, 2026, and 2027, respectively, with year-on-year growth rates of 13.1%, 28.2%, and 20.5%. The corresponding price-to-earnings ratios are estimated to be 25.6, 20.0, and 16.6 [5][36].