Shanghai Liangxin Electrical (SZ:002706) EBSCN·2025-04-01 08:45Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future returns exceeding the market benchmark by over 15% in the next 6-12 months [5][16]. Core Views - The company reported a revenue of 4.238 billion yuan in 2024, a decrease of 7.57% year-on-year, and a net profit attributable to shareholders of 312 million yuan, down 38.92% year-on-year [2][5]. - The overall gross margin for the company decreased by 2.09 percentage points to 30.36% in 2024, reflecting pressure on major business segments due to weak real estate demand [3][5]. - The company is focusing on technological research and development, having completed the development and enhancement of 84 products in 2024, which is expected to support long-term growth [3][4]. Revenue and Profitability Summary - The distribution electrical equipment segment saw a revenue decline of 1.76% to 2.759 billion yuan, with a gross margin drop of 2.25 percentage points to 30.04% [3]. - The terminal electrical equipment segment experienced a significant revenue decrease of 23.89% to 835 million yuan, with a gross margin decline of 2.34 percentage points to 39.88% [3]. - The control equipment segment grew by 3.89% to 458 million yuan, with a gross margin increase of 2.21 percentage points to 14.74% [3]. - The smart electrical segment's revenue decreased by 29.26% to 156 million yuan, but its gross margin increased by 0.69 percentage points to 23.13% [3]. Future Growth Potential - The company has over 20 years of experience in the data center sector and has established a strong presence, including winning significant projects with major telecom companies [4]. - The collaboration with global power electronics supplier Vertiv is expected to enhance the company's market reach, particularly in the growing data center market driven by AI advancements [4]. Earnings Forecast and Valuation - The company is projected to achieve net profits of 440 million yuan, 552 million yuan, and 665 million yuan for the years 2025, 2026, and 2027 respectively, with corresponding EPS of 0.39 yuan, 0.49 yuan, and 0.59 yuan [5][6]. - The current stock price corresponds to a PE ratio of 23, 18, and 15 for the years 2025, 2026, and 2027 respectively [5][6].