Harmontronics Automation(SH:688022) Soochow Securities·2025-02-09 11:39Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [1]. Core Insights - The company is refocusing on its core automotive business, with significant improvements noted in its high-margin new energy orders following a strategic adjustment [8][9]. - The company's Q3 performance is under pressure due to substantial inventory impairment provisions, with a reported revenue of 467 million yuan, down 90.5% year-on-year [9]. - The profitability is impacted by one-time strategic adjustment costs, with a gross margin of 17.59%, down 4.62 percentage points year-on-year [11][12]. - There is a notable increase in contract liabilities, which rose by 194.4% year-on-year, indicating improved cash flow management despite negative cash flow from operating activities [14]. Financial Forecasts - The company is projected to have a net profit of -1.11 billion yuan in 2024, with a gradual recovery expected in 2025 and 2026, reaching 70 million yuan and 130 million yuan respectively [17]. - The price-to-earnings ratio (P/E) is expected to be 36 in 2025 and 19 in 2026, reflecting a potential recovery in profitability [17].