Zhi Tong Cai Jing·2025-08-28 08:28Core Viewpoint - UBS initiates coverage on Dongfang Electric (01072) with a "Buy" rating and a target price of HKD 23.6, forecasting an average annual growth rate of 27% in earnings per share 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 a recurring service model, which is anticipated to significantly enhance profitability and valuation [1] - Maintenance services are identified as a strategic focus, with gross margins for 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]