Core Viewpoint - The company, Suochen Technology, focuses on CAE products and physical AI products, which cater to complex product development and engineering innovation needs in sectors like aerospace [2] Group 1: Product Offerings - The core products of the company include CAE products and physical AI products [2] - These products cover various areas such as engineering simulation, intelligent physical modeling, multi-field coupling analysis, and data-driven optimization [2] Group 2: Market Application - The company's offerings are designed to meet the demands of complex product research and development, particularly in the aerospace and engineering technology innovation fields [2] Group 3: Information Disclosure - For specific details regarding orders, customers, and cooperation, the company advises stakeholders to refer to its periodic reports and announcements published in designated information disclosure media [2]

Core Viewpoint - The company emphasizes the distinction between CAE products and physical AI, highlighting their unique roles in engineering simulation and understanding physical laws through AI technology [1] Group 1: CAE Products - CAE products are defined as computer-aided engineering simulation tools that utilize numerical calculations and physical modeling to validate product performance [1] - The company acknowledges the significant value of its CAD and CAE products in the development of physical AI, serving as a bridge between the physical and digital worlds [1] Group 2: Physical AI - Physical AI currently lacks a widely accepted definition but can be understood as a technology system that uses AI to comprehend the laws of the physical world and drive real-world actions [1] - The company is actively exploring the potential applications of physical AI in the industrial software sector, particularly in research and design [1] Group 3: AI Integration - The company has made positive progress in integrating AI technology into existing product functionalities and enhancing the efficiency of its internal R&D teams [1] - Future details regarding the integration of emerging technologies into the company's products will be disclosed through official channels [1]

Core Viewpoint - The company plans to enhance its commercial aerospace business by integrating technology and market strategies following the acquisition of Kunyu Lancheng, leveraging its proprietary physical AI technology and CAE products for satellite target detection and aerospace engineering operations [1] Group 1 - The company aims to provide foundational technical support for Kunyu Lancheng's core businesses, including satellite target detection and situational awareness [1] - The integration is expected to fully unleash the synergistic effects between the two companies, enhancing their market competitiveness [1] - The focus will be on building a more competitive commercial aerospace business system through this strategic acquisition [1]

Core Viewpoint - The company, Suochen Technology, confirmed that its core products include CAE products and physical AI products, which cater to the needs of complex product development and engineering innovation in fields such as aerospace [1] Group 1: Product Offerings - The core products of the company encompass CAE products and physical AI products [1] - These products cover various directions including engineering simulation, intelligent physical modeling, multi-field coupling analysis, and data-driven optimization [1] Group 2: Clientele and Market Focus - The company indicated that its products are designed to meet the demands of the aerospace sector among other complex product development areas [1] - Specific details regarding orders, clients, and cooperation information are to be referenced in the company's periodic reports and related announcements [1]

Group 1 - The company has projects in the commercial aerospace sector, primarily through its subsidiary, Kunyu Lancheng, which provides satellite target detection, situational awareness, and aerospace engineering operation and safety services [2] - The company's physical AI technology and CAE products are expected to empower the business expansion of Kunyu Lancheng, enhancing its market competitiveness [2] - The company expressed gratitude for investor interest in its commercial aerospace initiatives [2]

Group 1 - The company held its 22nd meeting of the second board on December 16, 2025, where all 7 attending directors approved the agenda [2][4] - The board approved the adjustment of internal investment structure and the postponement of the "Research and Development Center Construction Project" and "Annual Production of 260 DEMX Underwater Noise Testers Project" [3][12] - The deadline for the "Research and Development Center Construction Project" to reach the intended usable state has been postponed from April 2026 to April 2028 [3][10] Group 2 - The company raised a total of RMB 253,746.97 million from the public offering of 10,333,400 shares at a price of RMB 245.56 per share, with a net amount of RMB 231,574.91 million after deducting fees [7][8] - As of June 30, 2025, the company has invested a total of RMB 50,446.40 million of the raised funds [8] - The adjustments in the internal investment structure are based on the actual construction progress and strategic development needs, ensuring that the project implementation subject, total investment, and fund usage remain unchanged [6][11] Group 3 - The adjustments in the investment structure include increasing the investment in equipment and rental for the "Research and Development Center Construction Project" while reducing personnel costs [9] - For the "Annual Production of 260 DEMX Underwater Noise Testers Project," the company has increased fixed asset investment while reducing working capital [9] - The postponement is due to the complexity of the CAE products requiring highly skilled professionals, leading to a more cautious approach in fund utilization [10][11] Group 4 - The board's decision on the adjustments and postponement is within its approval authority and does not require shareholder meeting approval [6][12] - The sponsor institution, Guotai Junan Securities, has provided a clear verification opinion on the matter [7][13] - The adjustments will not adversely affect the company's normal operations or long-term development plans [11]

Financial Performance - For the first half of 2025, the company's operating revenue was approximately 333.60 million, an increase from 308.20 million in the same period last year, reflecting a growth of about 8.4% [1] - The total profit for the same period was a loss of approximately 64.08 million, compared to a loss of 13.31 million in the previous year [1] - The net profit attributable to shareholders was a loss of approximately 52.41 million, down from a profit of 5.98 million in the previous year [1] - The net profit after deducting non-recurring gains and losses was a loss of approximately 114.86 million, compared to a loss of 83.97 million in the same period last year [1] - The net cash flow from operating activities was a loss of approximately 85.66 million, an improvement from a loss of 149.70 million in the previous year [1] Asset and Liability Changes - As of the end of the first half of 2025, the company's net assets attributable to shareholders were approximately 2.56 billion, down from 2.68 billion at the end of the previous year [1] - The company's construction in progress increased by 28.62% compared to the end of the previous year, while cash and cash equivalents decreased by 18.42% [37] - Short-term borrowings accounted for 4.99% of total assets, which was an increase from 0% at the end of the previous year [40] Shareholder Information - The largest shareholder, Du Yulin, held 35.84% of the shares, with other shareholders also showing varying changes in their holdings [50][51] - The shareholding of Wan Jia Industry Preferred Mixed Securities Investment Fund (LOF) decreased by 0.114 percentage points [51] Valuation Metrics - As of August 29, the company's price-to-earnings (P/E) ratio was approximately 2352.01, the price-to-book (P/B) ratio was about 5.12, and the price-to-sales (P/S) ratio was approximately 14.37 [1]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 99.26 [1][5]. Core Views - The company reported a revenue of RMB 334 million for the first half of 2025, representing a year-over-year increase of 8.24%. However, the net profit attributable to the parent company was a loss of RMB 52.41 million, compared to a profit of RMB 5.98 million in the same period last year [1]. - The growth in revenue is attributed to ongoing investment in technology research and market expansion, particularly in overseas markets, while the decline in profit is due to adjustments in performance assessment cycles, increased equity incentive costs, and reduced government subsidies [1]. - The report highlights the company's strong performance in the overseas market, with a revenue increase of 42.21% year-over-year, particularly in countries like Japan, Thailand, Italy, Spain, Turkey, and the UAE, where business growth exceeded 50% [3]. Summary by Sections Financial Performance - In Q2 2025, the company achieved a revenue of RMB 208 million, a year-over-year increase of 10.59% and a quarter-over-quarter increase of 65.78%. The net profit for Q2 was a loss of RMB 444,000, compared to a profit of RMB 3.16 million in the same period last year [1]. - The company’s revenue from standard general software, purchased hardware and software, customized services, and technical services for the first half of 2025 was RMB 318 million, RMB 200,000, RMB 400,000, and RMB 800,000 respectively, with year-over-year changes of +10.47%, -14.75%, +7.81%, and -36.86% [2]. Product Development - The company invested RMB 223 million in research and development during the reporting period, an increase of 11.84% year-over-year. The focus is on integrating products like ZWCAD and ZW3D with other solutions to create a comprehensive CAx integrated solution [4]. - The report emphasizes the strong growth of core industrial software, particularly in 2D CAD products, which generated RMB 215 million in revenue, a year-over-year increase of 11.82% [2]. Market Strategy - The company is enhancing its overseas channel empowerment system and global marketing network, which is expected to drive revenue growth. The establishment of a core team in its Japanese subsidiary is part of this strategy [3]. - The report expresses optimism regarding the company's continued penetration in the CAD/CAE product market, particularly in the context of domestic substitution trends [2][4]. Earnings Forecast - The revenue forecast for the company for 2025-2027 is RMB 1.01 billion, RMB 1.23 billion, and RMB 1.51 billion respectively, with net profit forecasts of RMB 106 million, RMB 140 million, and RMB 178 million for the same periods [5][11]. - The report maintains a price-to-sales (PS) ratio of 16.7x for 2025, corresponding to the target price of RMB 99.26 [5].

Group 1 - The core viewpoint of the article highlights that Suochen Technology (688507.SH) leverages its self-controlled CAE products and physical AI products to enhance military information technology in various aspects [1] - The company's capabilities include improving simulation accuracy and real-time operational control, which aids in achieving data simulation in virtual environments [1] - Additionally, the company utilizes virtual data for real-time operational control in real environments [1]