Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, but it is strategically positioned for growth in emerging sectors and international markets, particularly in data center cooling technology and green energy equipment [1][5]. Group 1: Financial Performance - In the first half of 2025, the company achieved operating revenue of 3.118 billion yuan, a decrease of 6.92% compared to the same period in 2024 [1] - The net profit attributable to shareholders was 266 million yuan, down 19.71% year-on-year [1] - The net profit after deducting non-recurring items was 243 million yuan, a decrease of 18.38% year-on-year [1] Group 2: Technological Advancements - The company has made significant breakthroughs in data center liquid cooling technology, with its subsidiary's liquid cooling system heat exchanger being selected for the 2024 Shandong Province first set of technological equipment list [2] - The product line includes mature products recognized by the Ministry of Industry and Information Technology, such as the variable frequency centrifugal chiller and the air-cooled screw chiller with integrated natural cooling functions [2] - New products, including the IDC version magnetic levitation series and FanWall, have been certified and are being supplied in large quantities, enhancing the company's competitive edge in the data center temperature control market [2] Group 3: Strategic Initiatives - The company is actively expanding its second growth curve in alignment with the national "dual carbon" strategy and marine economy development plan [3] - A comprehensive industrial thermal control solution was launched, leveraging core technologies for high-temperature heat pumps to create an energy tiered utilization system [3] - The company is well-positioned to benefit from major national projects, including the 1.2 trillion yuan hydropower project and the acceleration of nuclear power station construction, which will drive demand for its cooling equipment [3] Group 4: International Expansion - The company's overseas business showed strong growth, with foreign revenue reaching 1.017 billion yuan, an increase of 30.16% year-on-year, accounting for 32.61% of total revenue [4] - This growth is attributed to the successful implementation of the "going to sea" strategy, supported by a global marketing network and technical service system [4] - The subsidiary in Hong Kong reported a net profit of 162 million yuan in the first half of 2025, demonstrating strong overseas operational capabilities [4] Group 5: Earnings Forecast - The company forecasts revenues of 7.502 billion yuan, 8.503 billion yuan, and 9.740 billion yuan for 2025, 2026, and 2027, respectively [5] - Earnings per share (EPS) are projected to be 0.71 yuan, 0.84 yuan, and 1.03 yuan for the same years [5] - The current stock price corresponds to price-to-earnings (PE) ratios of 20.0, 17.0, and 13.8 times for 2025, 2026, and 2027, respectively, reflecting the company's potential benefits from the booming data center market and ongoing international expansion [5]

Investment Rating - The report maintains a "Buy" investment rating for the company [2][10] Core Insights - The company has made significant advancements in data center liquid cooling technology, which is expected to drive growth opportunities [6] - The strategic focus on emerging sectors and green energy equipment aligns with national policies, providing new development opportunities [7] - The company's overseas business has shown strong growth, with international revenue reaching 1.017 billion yuan, a year-on-year increase of 30.16%, contributing significantly to overall performance [8][9] - Revenue forecasts for 2025-2027 are projected at 75.02 billion yuan, 85.03 billion yuan, and 97.40 billion yuan respectively, with corresponding EPS of 0.71 yuan, 0.84 yuan, and 1.03 yuan [10][12] Summary by Sections Financial Performance - In the first half of 2025, the company reported revenue of 3.118 billion yuan, a decrease of 6.92% compared to the same period in 2024, and a net profit of 266 million yuan, down 19.71% year-on-year [5] Technology and Product Development - The company has developed a comprehensive technology matrix in the data center temperature control sector, including new products that have received certification and are being supplied in large quantities [6] Strategic Initiatives - The company is actively expanding its second growth curve in line with national "dual carbon" strategies and marine economic development plans, launching an "Industrial Full-domain Thermal Control Comprehensive Solution" [7] Market Expansion - The overseas business platform has successfully penetrated markets in Southeast Asia, the Middle East, and Africa, gaining recognition in high-end sectors such as data center cooling and nuclear power refrigeration [9]

Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - In the first half of 2025, the company achieved revenue of 3.118 billion yuan, a year-on-year decrease of 6.9%, and a net profit attributable to the parent company of 266 million yuan, down 19.7%. In Q2 2025, revenue was 1.746 billion yuan, an increase of 1.8% year-on-year, while net profit was 172 million yuan, a decrease of 18.1%, with the decline narrowing compared to Q1 [2][6] - By the end of Q2 2025, the company's contract liabilities increased by 12.0% year-on-year, indicating that the order growth rate has turned positive for three consecutive quarters, with an acceleration in growth, particularly in the data center temperature control equipment orders [2][6] Summary by Sections Financial Performance - The company reported a revenue of 3.118 billion yuan in H1 2025, down 6.9% year-on-year, and a net profit of 266 million yuan, down 19.7%. In Q2 2025, revenue was 1.746 billion yuan, up 1.8% year-on-year, while net profit was 172 million yuan, down 18.1%, showing a narrowing decline compared to Q1 [2][6] - The net profit margin for Q2 2025 was 10.9%, a decrease of approximately 2.0 percentage points year-on-year, but an increase compared to the previous quarter. The gross margin was 29.4%, a slight decrease of 0.33 percentage points year-on-year [13] Order Trends - The order trend indicates that since Q2 2023, the growth rate of orders has slowed due to increased macroeconomic pressures. However, by the end of Q4 2024, contract liabilities showed a year-on-year growth of 1.4%, marking the first positive growth in six quarters. The growth rates for Q1 and Q2 2025 were 8% and 12%, respectively, indicating a positive trend [13] Business Structure - In H1 2025, revenue from central air conditioning (Yantai Ice Wheel Group Hong Kong Co., Ltd.) was 1.193 billion yuan, up 2.9% year-on-year, with net profit of 162 million yuan, up 27.0%. This growth is primarily driven by orders from the data center sector [13] - The overseas revenue for H1 2025 was 1.02 billion yuan, up 30.16% year-on-year, accounting for approximately 32.6% of total revenue, while domestic revenue was 2.1 billion yuan, down 18.2% [13] Cash Flow and Forecast - The operating cash flow for 2024 was 721 million yuan, a year-on-year increase of 112%. The cash flow significantly improved, with Q2 2025 showing a net cash flow of 110 million yuan, a slight decrease of 6.8% year-on-year [13] - The company is expected to achieve revenues of 7.09 billion yuan, 8.06 billion yuan, and 9.19 billion yuan for 2025, 2026, and 2027, respectively, with year-on-year growth rates of +6.9%, +13.6%, and +14.0% [13]