Key takeaway

As a leading player in China’s domestic scientific instrument industry, FPI stands to benefit significantly from the ongoing national drive towardlocalization and technological self-reliance. Looking ahead to full-year 2025, as supportive policies are further implemented and downstreamdemand for equipment replacement continues to grow, the company is well positioned to see rapid expansion in order intake and revenuerealization in the scientific instrument segment. Additionally, the acceleration of local government debt resolution is expected to ease thenegative impact of goodwill impairments and PPP-related drag on performance, thereby supporting earnings recovery. Meanwhile, FPIcontinues to improve profitability through cost reduction and operational efficiency enhancement.

As a leading player in China’s domestic scientific instrument industry, FPI has been selected as one of the eighth batch of “National ChampionEnterprise for Excellence in Specific Manufacturing Categories”. It holds a leading position in mass spectrometry, chromatography,spectroscopy and sample preparation, with a diversified business composition of “multi-technology platform, multi-product portfolio, multiscenarioapplications”. The company has developed a cross-scenario business model serving four major verticals: smart industry, smartenvironment, smart laboratories, and life sciences. As a domestic leader in high-end analytical instruments, FPI will continue to benefit fromlarge-scale equipment renewal, accelerated import substitution, and the development of emerging industries. The company’s strategy focuseson the localization of high-end instruments and evolving toward a deeply integrated ecosystem of “AI + scientific instruments + robotics ”.

The drag from PPP projects is expected to gradually ease. Since 2025, accelerated local government debt resolution is likely to mitigate thenegative impact from goodwill impairments and PPP business, supporting earnings recovery. With supportive industry policies beingimplemented and internal cost-efficiency measures ongoing, FPI’s profitability is expected to further improve.

We estimate that the company will achieve revenue of RMB4.066bn, RMB4.538bn, and RMB5.039bn in 2025-2027, representing YoY growthof 12.51%, 11.61%, and 11.04%, respectively. Net profit attributable to the parent company is projected at RMB320mn, RMB439mn, andRMB589mn, up 54.47%, 37.50%, and 34.12% YoY, implying PE multiples of 33.0x, 24.0x, and 17.9x. We initiate coverage with a “Buy” rating.