LTTC(000726) 新浪财经· Xin Lang Cai Jing·2025-05-08 00:31Core Viewpoint - The company's Q1 2025 performance showed a higher-than-expected net profit but lower-than-expected net profit excluding non-recurring items, primarily due to changes in fair value of financial assets and increased impairment losses [1][2]. Financial Performance - Q1 2025 revenue reached 1.453 billion yuan, a year-on-year increase of 5.1% - Net profit attributable to shareholders was 148 million yuan, up 117.5% year-on-year - Net profit excluding non-recurring items was 89 million yuan, down 27.6% year-on-year - The increase in net profit was mainly due to a fair value change gain of 60 million yuan from trading financial assets, while the decrease in net profit excluding non-recurring items was due to lower returns from investment funds and increased impairment losses [1][2]. Revenue Breakdown - The company experienced steady revenue growth in Q1 2025, with garment sales outperforming fabric sales - Domestic sales slightly declined year-on-year, while markets in Europe, the US, Japan, and South Korea saw double-digit growth, and Southeast Asia experienced single-digit growth - Garment sales volume and revenue increased, while fabric sales volume remained stable with a slight increase, but revenue decreased year-on-year due to price declines influenced by exchange rates [1]. Profitability Metrics - Gross margin remained stable at 23.5% year-on-year, attributed to lower raw material costs - The company reported a decrease in investment income of 19.22 million yuan to 4.29 million yuan year-on-year - Impairment losses increased by 16.37 million yuan to 35.03 million yuan year-on-year due to cautious inventory impairment provisions - The net profit margin attributable to shareholders increased by 5.3 percentage points to 10.2%, while the net profit margin excluding non-recurring items decreased by 2.8 percentage points to 6.1% [2]. Future Outlook - The company anticipates uncertainty in end-demand due to US tariff policies, which may impact short-term orders, but it has limited direct exposure to US exports - There is potential for continued growth in exports to Europe and Japan/South Korea - The gradual release of capacity from the company's new materials project and the Vietnam project is expected to reduce losses and drive profit growth in 2025 [3]. Earnings Forecast and Valuation - The company has adjusted its 2025 earnings forecast down by 29% to 482 million yuan and introduced a 2026 earnings forecast of 554 million yuan - The current stock price corresponds to a P/E ratio of 10.7x for 2025 and 9.3x for 2026 - The company maintains an outperform rating, with a target price of 7.34 yuan, implying a 16% upside potential based on the 2025/26 P/E ratios of 12.5x/10.8x [4].