This reversal follows a steep climb over previous quarters, where large firm adoption jumped from 3.7% in September 2023 to 5.7% by December 2024, and reached 9.2% in the second quarter of 2025. Medium-sized firms remain less likely to adopt AI, with maximums around 4.8%, while the smallest businesses, especially those with one to four employees, still report a modest but steady adoption rate of 5.5%.The AI adoption decline figures come from the Business Trends and Outlook Survey (BTOS), conducted biweekly ...

Summary of NARI Technology (600406.SS) 2Q25 Conference Call Company Overview - **Company**: NARI Technology (600406.SS) - **Industry**: Power Equipment and Grid Automation Key Financial Results - **2Q25 Revenue**: Rmb 15,348 million, +24% YoY - **Gross Profit**: Rmb 4,260 million, +8% YoY - **EBIT**: Rmb 2,636 million, +12% YoY - **Net Profit**: Rmb 3,137 million, +7% YoY - **Gross Margin (GPM)**: 28%, down 4 percentage points (pp) YoY - **Operating Margin (OPM)**: 17%, down 2 pp YoY - **Net Margin (NPM)**: 15%, down 2 pp YoY - **1H25 Revenue**: Rmb 28,243 million, +24% YoY - **1H25 GPM**: 28%, down 2.6 pp YoY Segment Performance - **Grid Automation Segment**: - Revenue: Rmb 12,225 million, +28% YoY in 1H25 - GPM: 30.3%, down 3 pp YoY - **Grid Digitalization Segment**: - Revenue: Rmb 3,900 million, +4% YoY in 1H25 - GPM: 23.4%, down 3 pp YoY - **Power Generation Segment**: - Revenue: Rmb 6,541 million, +30% YoY in 1H25 - GPM: 21.6%, down 2 pp YoY - **Industrial Internet Segment**: - Revenue: Rmb 1,245 million, +3% YoY in 1H25 - GPM: 20.0%, down 3 pp YoY - **Overseas Business**: - Revenue: Rmb 1,987 million, +139% YoY in 1H25 - Newly signed overseas contracts grew 200% YoY Expense Management - **SG&A Expense**: 13% of total revenue in 1H25, down from 14.9% in 1H24 - **Cash Flow from Operations**: Rmb 2,809 million in 1H25, representing 95% of net profit Investment Thesis - NARI Technology is positioned as a leading player in the power equipment sector in China, with significant market shares in various segments (34%-70%). - Expected to benefit from China's power grid modernization, with projected revenue and net profit CAGR of 10% and 12% respectively from 2025 to 2030. - Anticipated catalysts include State Grid's work plans and the upcoming 15th Five-Year Energy/Grid Plan in 2026. Valuation and Risks - **12-Month Target Price**: Rmb 30.2, based on a P/E ratio of 25X for 2026E - **Key Risks**: - Lower-than-expected fiscal support from the State Grid - Delays in UHV project approvals Conclusion - Despite pressure on GPM, NARI Technology shows strong revenue growth and effective expense management, maintaining a positive outlook for future performance and investment potential. The company is rated as a "Buy" with significant upside potential.

Company Overview - PagerDuty (PD) shares increased by 6.9% to $15.72 in the last trading session, with a higher-than-average trading volume, contrasting with a 1.3% loss over the past four weeks [1] - The company is experiencing strong demand for its AI-enhanced incident management, AIOps, and automation solutions, particularly in managing AI infrastructure and operations [1] Earnings Expectations - PagerDuty is expected to report quarterly earnings of $0.22 per share, reflecting a year-over-year increase of 4.8%, with revenues projected at $123.59 million, up 6.6% from the previous year [2] - However, the consensus EPS estimate for the quarter has been revised down by 33.3% over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [3] Industry Context - PagerDuty is part of the Zacks Internet - Software industry, where another company, Phunware (PHUN), saw its shares decrease by 1.2% to $3.21, despite a 6.9% return over the past month [3] - Phunware's consensus EPS estimate remains unchanged at -$0.15, representing a year-over-year change of 53.1%, and it currently holds a Zacks Rank of 3 (Hold) [4]

Investment Rating - The report rates NARI Technology as a "Buy" with a 12-month target price of Rmb31.8, implying a 39% upside based on an unchanged 25X 2026E P/E [1][12][15]. Core Insights - NARI Technology is expected to achieve a revenue growth of 13% year-on-year (yoy) in 2025E, surpassing its target of 12% yoy growth, supported by a backlog of Rmb50.7 billion and a strong order intake of over 50% yoy in 1Q25 [1][2][15]. - The company anticipates that its Ultra-High Voltage (UHV) revenue will double in 2025E, driven by significant project execution and new contracts [1][4][7]. - NARI Technology is positioned to benefit from China's structural smart grid needs, with a focus on overseas markets and new growth drivers such as AI integration and market-based electricity price reform [1][5][10][15]. Summary by Sections Revenue and Growth - The company targets Rmb64,500 million in revenue for 2025E, indicating a 12% yoy increase, marking a shift in guidance to a more conservative growth outlook after eight years [2][15]. - The 1Q25 revenue growth was reported at 16% yoy, with power grid automation growing by 25% yoy, primarily due to UHV revenue recognition [1][4]. Segment Performance - **Grid Automation**: Revenue in this segment was Rmb28.5 billion in 2024, with a growth expectation of over 10% yoy in 2025E, driven by UHV revenue [4]. - **Grid Digitalization**: This segment recorded Rmb12.4 billion in revenue in 2024, with a projected growth of close to 10% in 2025E, supported by national policies promoting AI integration and virtual power plants [5]. - **Power Generation**: Revenue reached Rmb12.2 billion in 2024, with a growth expectation of 14% yoy in 2025E, despite a moderation in installation growth [8]. - **Industrial Internet**: The segment faced a decline of 24% yoy in 2024 but is expected to return to growth in 2025E [9]. Overseas Business - NARI Technology's overseas revenue reached Rmb3.28 billion in 2024, a 135% yoy increase, contributing 6% to total revenue, with expectations for continued growth in 2025E [10][15]. Expense Management - The company guided an expense of Rmb7,741 million for 2025E, indicating a 19.6% yoy increase, primarily due to increased R&D investments [11][15]. Valuation and Financial Metrics - The report maintains earnings forecasts unchanged, with a focus on a stable margin profile supported by necessary investments in R&D and a reclassification of interest income [12][15].