EMPYREAN(SZ:301269) Xin Lang Cai Jing·2025-10-30 12:44Core Viewpoint - The company reported its Q3 2025 performance, showing a slight year-on-year revenue increase but a significant decline in net profit, indicating challenges in profitability despite revenue growth [1]. Financial Performance - In Q3 2025, the company achieved revenue of 303 million yuan, representing a year-on-year increase of 1.2% and a quarter-on-quarter increase of 13.5% [1]. - The gross margin was 92.8%, up 0.3 percentage points year-on-year and 5.7 percentage points quarter-on-quarter [1]. - The net profit attributable to shareholders was 6 million yuan, down 71.0% year-on-year and down 190.1% quarter-on-quarter; the non-recurring net profit was -4 million yuan [1]. - For the first three quarters, the company reported revenue of 805 million yuan, a year-on-year increase of 8.23%, with a net profit of 9 million yuan and a significant increase in operating cash flow by 545.5% to 185 million yuan [1]. Development Trends - The digital circuit board segment is expanding its product matrix to strengthen customer development. The company has introduced four core EDA products for digital chip simulation and verification, covering nearly 80% of the main tools in digital circuit design [1]. - The company anticipates accelerated revenue growth in 2025 due to the enriched product matrix in the digital field and the gradual confirmation of deferred orders from major clients, alongside an accelerated overseas expansion [1]. M&A Opportunities - The company is actively seeking merger and acquisition opportunities to enhance its EDA product matrix through a combination of independent research, collaborative development, and M&A [2]. - The focus is on providing complete end-to-end solutions for clients, with expectations of more market opportunities arising from M&A activities [2]. Profit Forecast and Valuation - Revenue forecasts for 2025 and 2026 have been revised down by 8.4% and 9.1% to 1.43 billion yuan and 1.95 billion yuan, respectively, due to the time required to refine the product matrix [3]. - Net profit forecasts for 2025 and 2026 have been reduced by 20.8% and 8.9% to 180 million yuan and 300 million yuan, respectively, reflecting ongoing investments in research and development [3]. - Despite the adjustments, the company maintains an outperform rating and a target price of 125 yuan, indicating a potential upside of 2.5% from the current stock price [3].