Core Viewpoint - The report by Guojin Securities indicates that Yinghuate (301272) is facing short-term performance pressure but is expected to achieve long-term profit growth, maintaining a "buy" rating for the company [1]. Financial Performance - In 2024, Yinghuate reported operating revenue of 597 million yuan, a year-on-year increase of 7.52%, and a net profit attributable to shareholders of 74 million yuan, a year-on-year decrease of 15.14% [1]. - For Q1 2025, the company achieved operating revenue of 96 million yuan, a year-on-year increase of 0.67%, but reported a net loss of 2 million yuan, a year-on-year decline of 124.92% [1]. Operational Analysis - The decline in net profit is primarily attributed to increased R&D investments aimed at improving processes and quality, with a research expense ratio of 8.15% in 2024, up 3.45 percentage points from 2023 [2]. - The company is positioned as a leading domestic brand in the scroll compressor market, currently undergoing a phase of domestic substitution, especially following the U.S. government's increase in tariffs on Chinese imports to 125% [2]. - The domestic market for scroll compressors is largely dominated by foreign brands, with a CR5 of 76.5% for foreign brands in 2024 [2]. Industry Trends - The Chinese government has issued a plan to promote the high-quality development of the heat pump industry, which is expected to enhance the sales of Yinghuate's scroll compressors as older, inefficient heat pump equipment is replaced [3]. Profit Forecast and Valuation - Revenue projections for Yinghuate are estimated at 677 million yuan, 771 million yuan, and 894 million yuan for 2025, 2026, and 2027 respectively, with net profits expected to be 86 million yuan, 100 million yuan, and 119 million yuan for the same years [4]. - The corresponding price-to-earnings ratios are projected to be 26, 22, and 19 times for 2025, 2026, and 2027 respectively [4].