Core Viewpoint - The company reported a significant decline in revenue and net profit for the first half of 2025, indicating challenges in its operational performance and market conditions [1] Financial Performance - In the first half of 2025, the company achieved operating revenue of 966 million yuan, a year-on-year decrease of 28.92% [1] - The net profit attributable to shareholders was -21.90 thousand yuan, a year-on-year decline of 100.62% [1] - The net profit excluding non-recurring items was 1.71 million yuan, down 95.30% year-on-year [1] - In Q2 2025, operating revenue was 797 million yuan, a year-on-year decrease of 39.00% but a quarter-on-quarter increase of 373.60% [1] - The net profit attributable to shareholders in Q2 was 8.11 million yuan, down 89.29% year-on-year but up 197.37% quarter-on-quarter [1] - The net profit excluding non-recurring items in Q2 was 9.36 million yuan, down 87.85% year-on-year but up 222.31% quarter-on-quarter [1] Order and Revenue Structure - The sales revenue from refining equipment accounted for 2.02% of the main business revenue, while petrochemical equipment sales accounted for 2.40% [2] - Engineering general contracting services made up 12.57% of the main business revenue, with other products and services contributing 83.00% [2] - The company has a total of 5.868 billion yuan in orders above 20 million yuan, which will gradually confirm revenue from 2025 to 2026, likely increasing the proportion of engineering general contracting services [2] Industry Trends - The Ministry of Industry and Information Technology announced a new round of policies aimed at stabilizing growth in key industries, including petrochemicals, which will drive the replacement of outdated equipment [3] - The "Implementation Plan for the Innovative Development of the Fine Chemical Industry (2024-2027)" emphasizes the importance of fine chemicals and new chemical materials for high-quality development in the petrochemical sector [3] - The industry is expected to increase investment in new technologies and processes, promoting technological advancement and industrial upgrading towards green and low-carbon development [3] Company Strategy - The company is actively investing in green and low-carbon technologies, aligning with national strategies for sustainable development [4] - It is focusing on clean energy, low-carbon processes, and green products, while exploring high-end, intelligent, and green implementation paths in the petrochemical sector [4] - The company aims to expand its market presence in petrochemical equipment, refining equipment, EPC general contracting services, and related products, while also extending its business into new materials and new energy [4] - The projected net profit for the company from 2025 to 2027 is estimated at 130 million yuan, 150 million yuan, and 200 million yuan, with corresponding PE ratios of 27.4X, 24.0X, and 17.5X based on the closing price on August 29, 2025 [4]

Core Viewpoint - Shanghai Zhuoran Engineering Technology Co., Ltd. has significantly increased its revenue from EPC (Engineering, Procurement, Construction) services, with a reported income of 1.027 billion yuan in 2024, representing a year-on-year growth of 700.95% and accounting for 37.02% of its main business revenue [1][2]. Group 1: EPC Service Business Model - The company has actively expanded its EPC service business to enhance revenue and strategically transform its operations, moving from being a core supplier of large refining equipment to a comprehensive solution provider [2][3]. - The EPC model involves comprehensive project management, including design, procurement, construction, and post-service, ensuring quality, safety, and timely completion [3][4]. - The company has established a full lifecycle service system, integrating consulting, design, intelligent manufacturing, engineering implementation, and smart operation [2][3]. Group 2: Revenue Recognition and Accounting Standards - The company adopts the gross method for revenue recognition in EPC projects, as it acts as the primary responsible party in transactions with clients [6][8]. - Revenue is recognized based on the progress of completion, calculated as the ratio of costs incurred to the estimated total costs [10][11]. - The company has confirmed revenue from various projects, including a 55,000-ton carbon four deep processing and hydrogen comprehensive utilization project, with total contract amounts and timelines detailed [14][15]. Group 3: Project Execution and Risks - The company has successfully executed the Guangxi Hongkun project, which involves the production of 600,000 tons of bio-jet fuel, with significant strategic value and sustainable development potential [20][21]. - The project has received government approval and is aligned with national green development strategies, indicating strong policy support [21][22]. - The company has implemented a comprehensive risk management system to ensure project progress and financial security, including dynamic matching of funding plans with engineering progress [22].