Summary of Longking Environmental Conference Call Company Overview - **Company**: Longking Environmental - **Industry**: Air Pollution Control Equipment Key Points Industry and Market Dynamics - The 2026 environmental special fund budget allocates 46% (CNY 24.4 billion) to air pollution prevention, a 19% increase from the 2025 budget, indicating heightened government focus on air pollution control [2][3][4] - The demand for air pollution control equipment is expected to grow due to the need for retrofitting existing coal power plants and ultra-low emission transformations in non-electric industries such as steel and cement [2][6][7] Company Performance - In the first three quarters of 2025, Longking Environmental secured new environmental orders worth CNY 7.626 billion, a year-on-year increase of 1.1%, with a quarterly growth of 12% [2][6] - The company has a backlog of orders amounting to CNY 19.7 billion, which supports stable revenue recognition and indicates a healthy order pipeline [2][6][9] Financial Health and Growth Prospects - Longking Environmental is the largest manufacturer of air pollution control equipment globally, with annual new orders nearing CNY 10 billion and a backlog close to CNY 20 billion, which is expected to sustain profits over the next three years [2][8][9] - The company is projected to achieve net profits of CNY 1.2 billion, CNY 1.5 billion, and CNY 1.7 billion for the years 2025 to 2027, with corresponding P/E ratios of 16x, 13x, and 11x, reflecting a growth rate exceeding 20% [12][13] Strategic Partnerships and Shareholder Confidence - Major shareholders, including Zijin Mining, have increased their stakes in Longking Environmental, with Zijin's holding rising above 30%, demonstrating confidence in the company's value and business synergy [2][10][11] - Longking Environmental is involved in projects that align with Zijin Mining's green energy needs, such as a 200 MW microgrid project expected to generate over CNY 100 million in annual profit [4][11] New Business Ventures - The company is diversifying into new areas such as high-altitude operation robots and new energy heavy trucks, with investments in JiTai Intelligent and Hunan Chuangyuan, which are anticipated to create a third growth curve for the company [4][12] Conclusion - Longking Environmental is well-positioned to benefit from increased government support and market demand for air pollution control solutions, with a solid order backlog and strategic partnerships enhancing its growth trajectory [2][10][11]

Investment Rating - The report maintains a "Strong Buy" rating for the company, expecting it to outperform the benchmark index by over 20% in the next six months [2][16]. Core Views - The company's performance in the first half of 2025 met expectations, with significant growth in overseas markets, particularly in non-American regions [2][7]. - The company is positioned as a leader in the aerial work platform industry, with a focus on expanding its product offerings and market reach, especially in high-end markets [7][8]. - The report highlights the company's proactive measures in response to challenges posed by trade tensions and domestic market pressures, leading to a robust performance [7][8]. Financial Summary - Total revenue for 2025 is projected to be 91.73 billion yuan, with a year-on-year growth of 17.6%. By 2027, revenue is expected to reach 120.76 billion yuan, growing at 15.3% [3][8]. - The net profit attributable to the parent company is forecasted to be 21.0 billion yuan in 2025, reflecting a significant year-on-year increase of 28.8%, and is expected to reach 28.1 billion yuan by 2027 [3][8]. - Earnings per share (EPS) are projected to be 4.14 yuan in 2025, increasing to 5.54 yuan by 2027 [3][8]. Market Performance - The company achieved a total revenue of 43.4 billion yuan in the first half of 2025, representing a 12.4% year-on-year increase, with a net profit of 10.5 billion yuan, up 27.6% [7][8]. - The overseas market contributed significantly, with revenue from non-European and American markets reaching 33.7 billion yuan, a 21.25% increase year-on-year, accounting for 77.8% of total revenue [7][8]. Product Development - The company has launched several innovative aerial work robots and diversified its product line to address customer needs effectively [7][8]. - The report emphasizes the company's commitment to electric product offerings and the introduction of a service to convert diesel products to electric, enhancing its competitive edge [7][8].

Core Viewpoint - The integration of advanced technologies such as 5G, AI, digital twins, and collective intelligence is accelerating the evolution of grain storage robots towards a more intelligent, collaborative, and inclusive direction, providing robust technological support for safeguarding national grain reserves and enhancing food storage capabilities [1][5]. Group 1: Current State of Grain Storage - Traditional grain storage operations heavily rely on manual labor, which is labor-intensive and poses safety risks due to harsh working conditions [2]. - The introduction of various robots in grain storage facilities is transforming tasks such as handling, inspection, and cleaning, leading to a significant improvement in operational efficiency and safety [3]. Group 2: Advantages of Robotic Automation - Robots can operate continuously, significantly increasing work efficiency, especially during peak seasons, and reducing the risk of accidents in high-dust and high-intensity environments [3]. - The application of robots is driving the digital transformation of grain storage, enabling data connectivity across planting, processing, and logistics, thus enhancing the overall efficiency of the supply chain [3]. Group 3: Challenges and Solutions - The promotion of robotic applications faces challenges such as high initial investment, insufficient technical adaptability, and a lack of skilled personnel [4]. - Solutions include government financial support, customized technology development for different scales of grain storage, and the establishment of unified industry standards to ensure compatibility and efficiency [4].