KYLAND(SZ:300353) HTSC·2025-03-05 07:25Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 16.17 [8][19]. Core Views - The company reported a revenue of RMB 1.029 billion for 2024, a year-on-year decrease of 11.52%, and a net profit attributable to the parent company of RMB 38.63 million, down 85.16% year-on-year. However, the company achieved a significant quarter-on-quarter revenue increase of 213.32% in Q4 2024 [1][5]. - The decline in revenue is primarily attributed to a slowdown in downstream demand in traditional industries such as industrial communication. Despite this, there is optimism regarding high growth in the company's industrial OS revenue in 2025 due to domestic substitution trends and the mass production of robots driving industrial control product demand [1][2]. Summary by Sections Financial Performance - In 2024, the company's industrial network communication business generated revenue of RMB 661 million, down 3.87% year-on-year, while the intelligent controllers and solutions business saw a revenue drop of 37.43% to RMB 227 million. Conversely, the industrial operating system and related software services revenue increased by 25.80% to RMB 140 million [2]. - The company expects a recovery in profitability as it focuses on expanding its industrial software products and reducing lower-margin businesses [2]. Market Opportunities - The Ministry of Industry and Information Technology issued guidelines for updating industrial operating systems and software, aiming to complete the replacement of 800,000 industrial operating systems and 2 million software units by 2027. This policy is expected to accelerate domestic substitution, benefiting the company's industrial software business [3]. - The company has signed large-scale application agreements with over 20 enterprises in sectors such as semiconductors and robotics, indicating strong demand for its industrial OS [3]. Product Development - The company launched an AI controller integrated with its industrial operating system and software, aimed at providing a comprehensive control platform for embodied robots. This product is expected to benefit from the ongoing trend of robot mass production [4]. - The development of the MaVIEW Robo software for intelligent robots is designed to be compatible with mainstream robotic arms and humanoid robot joints, targeting applications in sorting, painting, welding, and assembly [4]. Earnings Forecast and Valuation - The earnings per share (EPS) forecast for 2025-2027 is RMB 0.13, RMB 0.23, and RMB 0.33, respectively. The company’s target market capitalization for 2026 is set at RMB 9.94 billion, with a revised target price of RMB 16.17, reflecting an increase in valuation multiples for both software and hardware businesses [5][19]. - The software business is expected to grow at a compound annual growth rate (CAGR) of 102% from 2025 to 2026, significantly higher than the average of comparable companies [5][17].