Core Insights - The conference highlighted the emergence of "proactive immunity" in cybersecurity, emphasizing the need for a new approach to security in the AI era [1][8] - The concept of "endogenous security" was introduced, which integrates security capabilities into digital systems from their inception, shifting from passive defense to proactive prediction and automatic defense [3][4] Group 1: Endogenous Security Theory - The endogenous security theory aims to provide a systematic solution to current cybersecurity challenges by embedding security as a native attribute of digital systems [3][4] - This approach allows systems to possess self-defense, self-repair, and self-evolution capabilities, ensuring stable core functionality even under malicious attacks or internal failures [1][3] Group 2: Industry Applications - The first batch of smart connected vehicles equipped with endogenous security intelligent agents is expected to be launched next year, with successful testing already conducted [4] - In the 5G communication sector, endogenous security technology has been deployed in 28 provinces, demonstrating its application in various scenarios such as urban traffic and industrial manufacturing [4][5] Group 3: Collaborative Initiatives - The "Endogenous Security Ecological Partner Program" was launched, involving major industry players to foster deep cooperation in technology research, standard building, and talent cultivation [7] - The eighth "Strong Network" international elite challenge showcased the industry's commitment to collaboration, featuring nearly 40 international teams and introducing AI attack agents as special invited teams [7] Group 4: Future Outlook - The endogenous security technology is on the verge of industrialization, with a comprehensive service system for smart connected vehicle security being launched [6] - The ongoing development of endogenous security technology is positioned to enhance global cybersecurity governance, contributing to a shift from passive response to proactive immunity [8]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 23.50 [7][8]. Core Views - The company achieved a turnaround in profitability in Q1 2025, with revenue of RMB 1.26 billion, a year-on-year increase of 84.41%, and a net profit of RMB 13.23 million, exceeding previous expectations [1]. - The low Earth orbit satellite business is expected to drive significant growth, supported by the acceleration of the Qianfan constellation project, which aims to launch 1,296 satellites by 2028 [2]. - The company is focusing on military broadband communication and optimizing tactical communication equipment to strengthen its leading position in the industry [2]. Summary by Sections Financial Performance - In 2024, the company reported revenue of RMB 353.3 million, a year-on-year increase of 12.97%, and a net loss of RMB 123.89 million, showing a reduction in losses compared to the previous year [6]. - The gross margin for 2024 was 43.28%, with a net profit margin of -35.06%, reflecting a year-on-year improvement of 25.61 percentage points [3]. - For Q1 2025, the gross margin was 37.56%, and the net profit margin was 10.54%, indicating a significant year-on-year increase of 25.28 percentage points [3]. Revenue and Profit Forecast - The revenue forecast for 2025-2027 has been adjusted downwards due to short-term pressures on military broadband business and an increase in satellite business share, with expected net profits of RMB 241.93 million, RMB 289.79 million, and RMB 358 million for 2025, 2026, and 2027 respectively [4][19]. - The company’s PE ratio for 2025 is projected at 61x, reflecting its strategic positioning in the G60 satellite network and military broadband sector [4][20]. Market Position and Growth Drivers - The company is positioned as a core supplier for the Qianfan constellation, with expected sales of RMB 150 million to partners in 2024, accounting for 43% of its revenue [2]. - The military broadband sector is anticipated to recover gradually, with new product applications in military 5G and data links expected to contribute to revenue and profit recovery [1][2].