Group 1: Financial Performance - The company achieved a significant increase in revenue and net profit, with net profit growing by 53.91% year-on-year [3] - In the first half of 2025, the company reported revenue of 2.425 billion yuan, a year-on-year increase of 42.17%, and a net profit of 492 million yuan, reflecting strong operational performance [3] Group 2: Business Strategy and Operations - The company is focusing on technological innovation and digital transformation to enhance production capacity and efficiency, aiming to support business growth [4] - The Thailand factory officially commenced production in June 2025 and is currently in the ramp-up phase, with plans to accelerate customer certification and product introduction [5] - The company is actively expanding its overseas market presence, particularly through the Thailand facility, which is positioned to serve high-performance PCB applications [5] Group 3: Market Demand and Customer Relations - The company is experiencing strong demand for computing power infrastructure, which is driving its business growth [3] - Due to commercial policy restrictions, the company is unable to disclose specific details about its overseas suppliers and customers [2][6] - The company maintains stable relationships with major domestic and international server brand clients and ODM customers [4] Group 4: Future Outlook and Growth Measures - The company plans to continue enhancing its management capabilities, reducing costs, and improving operational efficiency to sustain revenue and profit growth [2] - The company is committed to increasing research and development investments to ensure its core technologies remain competitive in the market [4] - The net cash flow from operating activities increased by 67.30% year-on-year, indicating improved cash collection and financial health [4]

Core Viewpoint - Deep South Circuit achieved a net profit attributable to shareholders of 1.36 billion yuan in the first half of 2025, representing a year-on-year increase of 37.75% [1] - The company has established itself as a leading player in the PCB industry in China and a pioneer in the packaging substrate sector [1] Financial Performance - In Q2, the net profit attributable to shareholders reached 869 million yuan, showing a year-on-year growth of 42.92% and a quarter-on-quarter increase of 76.74% [1] Industry Outlook - The company benefits from increased demand in the communication sector due to the growth of high-speed switches and optical module products, with a rising proportion of wired communication products [1] - There is a significant year-on-year increase in orders in the data center sector, driven by the demand for AI accelerator cards and the Eagle Stream platform products [1] Product Development - In the packaging substrate sector, the company is steadily advancing the development of storage-related products, with ongoing projects for FC-BGA substrate capacity building, FC-CSP fine line substrates, and RF radio frequency substrate technology improvements [1]

Investment Rating - The report maintains a "Buy" rating for Guanghe Technology (001389) [3][4] Core Views - The company experienced rapid growth in the first half of 2025, with revenue reaching 2.425 billion yuan, a year-on-year increase of 42.17%. The net profit attributable to shareholders was 492 million yuan, reflecting a growth of 53.91% [4][5] - The growth is attributed to the company's proactive approach in seizing opportunities from strong demand for computing power, expanding its market for computing products, and overcoming technical bottlenecks in key product areas such as high-end HDI, AI servers, high-speed switches, next-generation general servers, and optical modules [5] - The company's gross margin improved to 36.41%, up by 2.07 percentage points year-on-year, while the net margin increased to 20.27%, up by 1.54 percentage points [5] Financial Summary - The total revenue for 2023 is projected at 26.78 billion yuan, increasing to 35.34 billion yuan in 2024, and further to 51.07 billion yuan in 2025, with an estimated growth to 63.54 billion yuan in 2026 [6] - The net profit attributable to shareholders is expected to rise from 4.15 billion yuan in 2023 to 6.76 billion yuan in 2024, reaching 10.09 billion yuan in 2025, and 13.18 billion yuan in 2026 [6] - The earnings per share (EPS) are forecasted to be 2.37 yuan for 2025 and 3.10 yuan for 2026, with corresponding price-to-earnings (PE) ratios of 29 and 22 [5][6]

Investment Rating - The report assigns a "Buy" rating to the company, indicating a positive outlook for its stock performance [4]. Core Insights - The company is a leader in AI server manufacturing and has a comprehensive layout in smart manufacturing, benefiting from the rapid growth in AI-driven demand [14][27]. - The AI server business is experiencing high demand, with significant revenue growth projected in the coming years, driven by major cloud service providers' capital expenditures [2][39]. - The company has a stable and concentrated shareholding structure, with a seasoned management team that supports its strategic initiatives [21][25]. Summary by Sections 1. Company Overview - The company operates in three main segments: communication and mobile network equipment, cloud computing, and industrial internet, achieving full coverage of five major categories in the digital economy [14]. - In the first half of 2025, the company reported a 35.58% year-on-year revenue increase to CNY 360.76 billion, with a net profit growth of 38.61% to CNY 12.11 billion [27]. 2. AI Server Demand and Cloud Computing Benefits - The demand for AI servers remains robust, with major cloud service providers increasing their capital expenditures significantly, reaching USD 90 billion in Q2 2025, a 70% year-on-year increase [2][39]. - The company's AI server revenue grew over 60% year-on-year in Q2 2025, contributing to a substantial increase in overall cloud computing revenue [2][39]. 3. High-Speed Switches and Client Collaborations - The market for high-speed switches is expanding, with the 400G market projected to reach approximately USD 8.91 billion by 2024, and the 800G market expected to grow significantly [3]. - The company has deepened collaborations with major clients, enhancing its competitive advantage in the data center interconnect market [3]. 4. Financial Forecast and Investment Recommendations - The company is expected to achieve revenues of CNY 971.79 billion, CNY 1,653.68 billion, and CNY 2,205.94 billion in 2025, 2026, and 2027, respectively, with corresponding net profits of CNY 34.15 billion, CNY 52.43 billion, and CNY 65.16 billion [4][5]. - The report highlights the company's valuation advantages compared to peers, with projected P/E ratios of 26, 17, and 14 for 2025, 2026, and 2027, respectively [4].

Core Insights - In the first half of 2025, the company achieved operating revenue of 2.425 billion yuan, representing a year-on-year growth of 42.17% [2][3] - The net profit attributable to shareholders reached 491.58 million yuan, marking a year-on-year increase of 53.91% [2][3] - The net profit excluding non-recurring gains and losses was 477.55 million yuan, up 47.78% compared to the same period last year [2][3] Financial Performance - The net cash flow from operating activities was 453.10 million yuan, reflecting a significant increase of 67.30% year-on-year [3] - Basic earnings per share were 1.1610 yuan, a rise of 46.17% from the previous year [3] - Total assets at the end of the reporting period amounted to 6.274 billion yuan, an increase of 10.35% from the end of the previous year [3] Business Development - The company benefited from strong demand in the computing power supply chain, actively seizing opportunities for growth in computing power products [2][4] - The company focuses on technological innovation in key areas such as materials, new product development, and digital management [4] - The full subsidiary, Huangshi Guanghe, achieved profitability during the reporting period by enhancing cost control and optimizing product structure [4] Market Expansion - The Thailand Guanghe facility officially commenced production in June 2025 and is currently in the capacity ramp-up phase [4] - The company aims to accelerate the certification and product introduction for key clients in the second half of the year, gradually releasing production capacity [4] - The Thailand Guanghe project is positioned as a crucial base for the company's expansion into overseas markets, laying a solid foundation for long-term performance growth [4]

Core Insights - The report highlights the strong growth potential of Industrial Fulian (601138) driven by AI demand, with projected revenues of 843.4 billion, 1,320.3 billion, and 1,715.6 billion yuan for 2025-2027, reflecting growth rates of 38.5%, 56.5%, and 29.9% respectively, and net profits of 30.5 billion, 50.5 billion, and 59.4 billion yuan, with corresponding growth rates of 31.5%, 65.5%, and 17.6% [2][11] - Xiaomi Group (01810) reported record high revenues and profits in Q2 2025, with revenues of 116 billion yuan, a year-on-year increase of 30.5%, and adjusted net profits of 10.8 billion yuan, up 75% year-on-year, driven by IoT and EV segments [10][12] - Nine Dragons Paper (2689.HK) expects significant profit growth for FY25, with net profits projected between 2.1 billion and 2.3 billion yuan, representing a year-on-year increase of 165%-190%, attributed to increased sales and cost reductions [13][15] Industrial Fulian (601138) - The company’s main business includes cloud computing, communication, and industrial internet, with a notable increase in cloud computing revenue expected to reach 319.38 billion yuan in 2024, a 64.4% year-on-year growth [11] - AI server demand is surging, with global cloud providers' capital expenditures increasing by 64% year-on-year, indicating strong market demand [11] - The company is expected to maintain a leading position in the high-speed switch market, with revenues from 800G switches projected to triple compared to 2024 [11] Xiaomi Group (01810) - The company’s IoT segment saw a revenue increase of 45% in Q2, with smart home appliances achieving record sales, particularly in air conditioning and washing machines [12][14] - The electric vehicle segment reported a revenue of 21.3 billion yuan with a significant improvement in gross margin, indicating a positive trend towards profitability [12][14] - Xiaomi plans to expand its global footprint in the home appliance sector, marking 2025 as a pivotal year for international sales [12][14] Nine Dragons Paper (2689.HK) - The company is focusing on a diversified product strategy and integrated pulp-paper operations, which are expected to enhance profitability significantly [15][16] - The anticipated increase in paper prices due to improved supply-demand dynamics is expected to further boost profits [15][16] - The company’s production capacity is set to expand, with new lines expected to come online, reinforcing its market position [15][16] Electric Heavy Trucks Industry - The electric heavy truck market in China is experiencing rapid growth, with sales reaching 79,200 units in the first half of 2025, representing a penetration rate of 22% [18] - The European market is also seeing a rise in electric heavy truck adoption, with projections indicating significant growth in sales and market penetration by 2026 [18] - The industry is becoming increasingly collaborative, with a focus on developing specialized products across the supply chain, enhancing profitability potential [18] Other Companies - Keda Li (002850) reported strong revenue growth in Q2, driven by its structural components business and advancements in robotics [19] - China Hongqiao (01378) is set to benefit from increased production capacity and a favorable pricing environment for aluminum products, with projected net profits significantly increasing [20][21] - Blue Sky Technology (300487) continues to show growth potential, with a focus on expanding its product offerings and market presence [22]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [6][7]. Core Insights - The company has experienced rapid growth in the past two years, with a significant increase in revenue and net profit driven by the demand for AI servers and cloud computing [6][28]. - The cloud computing segment has become the company's largest business, accounting for over 50% of revenue in 2024, with a projected growth rate of 62% from 2025 to 2027 [31][79]. - The company is well-positioned to benefit from the increasing capital expenditures of major global cloud providers, indicating strong demand for AI-related services [50][57]. Summary by Sections 1. Company Overview - The company, backed by Hon Hai, has rapidly grown since its establishment in 2015, with a focus on cloud services and industrial internet [17]. - The management team is experienced, with a new rotating CEO system implemented to enhance decision-making processes [25]. 2. Cloud Computing Business - The cloud computing sector is expected to see substantial growth, with revenue projections of 5,175 billion, 9,110 billion, and 12,094 billion from 2025 to 2027, respectively [8][79]. - The demand for AI servers is robust, with significant capital expenditure increases from major cloud players, reflecting a strong market outlook [50][57]. 3. Other Business Segments - The high-speed switch market is experiencing rapid growth, with the company's 800G switches seeing a revenue increase of nearly three times in the first half of 2025 compared to the previous year [68]. - The precision structure components for consumer electronics are benefiting from innovations in AI smartphones, with a 17% revenue increase in the first half of 2025 [69]. 4. Financial Forecast and Valuation - Revenue forecasts for 2025 to 2027 are 8,434 billion, 13,203 billion, and 17,156 billion, with corresponding growth rates of 38.5%, 56.5%, and 29.9% [79]. - The projected net profit for the same period is 305 billion, 505 billion, and 594 billion, with growth rates of 31.5%, 65.5%, and 17.6% [79].

Investment Rating - The report maintains an "Add" investment rating for the company [2] Core Views - The company reported a revenue of 3.77 billion yuan for the first half of 2025, representing a year-on-year increase of 91%, with a net profit of 530 million yuan, up 452% year-on-year [1] - The company is investing 1.9 billion yuan to expand its PCB production capacity, focusing on AI computing clients and high-end markets [6] - The second quarter of 2025 saw a revenue of 2.19 billion yuan, a year-on-year increase of 101.1%, driven by the growth in AI servers and high-speed switches [6] - The company expects significant growth in revenue and net profit from 2025 to 2027, with projected revenues of 82.0 billion yuan, 118.9 billion yuan, and 160.6 billion yuan respectively [6] Financial Data and Valuation - The company’s total revenue is projected to decline by 7% in 2023, followed by growth rates of 43%, 75%, 45%, and 35% in the subsequent years [12] - The projected earnings per share (EPS) are expected to rise from -0.03 yuan in 2023 to 3.71 yuan in 2027 [12] - The price-to-earnings (PE) ratio is expected to improve from -1826.8 in 2023 to 14.8 in 2027 [12] - The company’s return on equity (ROE) is projected to increase from -0.6% in 2023 to 36.8% in 2027 [12]

Core Viewpoint - Industrial Fulian reported a record high revenue of 200.34 billion yuan in Q2 2025, representing a year-on-year growth of 36%, and a net profit of 6.88 billion yuan, up 51% year-on-year, indicating strong performance driven by AI server business [1] Group 1: Financial Performance - Q2 2025 revenue reached 200.34 billion yuan, a 36% increase year-on-year [1] - Net profit for Q2 2025 was 6.88 billion yuan, reflecting a 51% year-on-year growth [1] - Both revenue and net profit achieved historical highs for the same period [1] Group 2: Business Segments - The AI server business shows strong competitiveness, expected to continue driving performance growth [1] - Overall server revenue grew by over 50% in Q2 2025, with cloud service server revenue increasing by 150% year-on-year [1] - AI server revenue experienced a year-on-year growth of over 60% [1] Group 3: Market Outlook - High demand for high-speed switches positions the company to benefit from the growth of the data center interconnect market [1] - The upcoming AI mobile phones are anticipated to drive a high-end replacement wave, leading to a structural recovery in terminal demand [1] - The company maintains strong competitiveness in high-end mobile precision components, likely to benefit from favorable high-end mobile demand [1] Group 4: Valuation - The company is valued using a comparable company PE of 22 times for 2026, resulting in a target price of 48.18 yuan, with a maintained "buy" rating [1]

Market Trends - The domestic market indices showed positive performance with the Shanghai Composite Index closing at 3,683.46, up by 0.48%, and the Shenzhen Component Index rising by 1.76% to 11,551.36 [4]. Industry Commentary - In the chemical pharmaceutical sector, the oral GLP-1 small molecule receptor agonist has reached phase III clinical endpoints, showcasing weight loss potential in domestic pipelines during U.S. clinical trials [5][6]. - The AI-powered slag removal equipment developed by Qingda Environmental Protection has been recognized as internationally leading, aiming for a smart operation model with self-sensing and self-diagnosing capabilities [8][9]. Company Commentary - Qingda Environmental Protection (688501.SH) has received approval for a private placement to raise up to 150 million yuan, aimed at enhancing liquidity. The company is expected to see significant revenue growth driven by the demand for flexible transformation in thermal power generation [8][9]. - 361 Degrees reported a strong performance in e-commerce channels with a mid-year dividend payout ratio of 45%, reflecting robust growth in online sales [8]. - Industrial Fulian (601138.SH) reported a 35.58% year-on-year increase in revenue for the first half of 2025, driven by strong demand for AI servers and high-speed switches [17][19]. - Zhigao Machinery (920101.BJ) is recognized as a "small giant" in the engineering machinery sector, focusing on rock drilling equipment and air compressors, with a strong market presence [16]. Financial Performance - Qingda Environmental Protection anticipates revenue between 900 million to 1.25 billion yuan for the first half of 2025, representing a year-on-year growth of 75.1% to 143.2% [9]. - 361 Degrees expects revenues of 113.67 billion, 127.14 billion, and 141.10 billion yuan for 2025-2027, with net profits projected to grow steadily [12]. - Industrial Fulian's EPS is projected to be 1.56, 2.01, and 2.61 yuan for 2025-2027, maintaining a "buy-A" rating based on strong growth prospects [19].