Zhi Tong Cai Jing·2025-08-28 08:11Core Viewpoint - UBS initiates coverage on Dongfang Electric (600875) with a "Buy" rating and a target price of HKD 23.6, forecasting an annual earnings per share growth rate of 27% from 2024 to 2028, compared to 11% from 2020 to 2024 [1] Group 1 - The company is expected to shift from one-time hardware sales to an annuity service model, which is anticipated to significantly enhance profitability quality and valuation [1] - Maintenance services are identified as a strategic focus, with gross margins from service contracts being four times that of equipment sales [1] - The group is projected to achieve a compound annual growth rate of 25% in maintenance service gross margins from 2025 to 2028, contributing 14 percentage points to annual earnings growth [1]