China XD(601179) SINOLINK SECURITIES·2025-04-15 01:17Investment Rating - The report maintains a "Buy" rating for the company, expecting significant profit growth in the coming years [5]. Core Insights - The company achieved a revenue of 22.28 billion RMB in 2024, a year-on-year increase of 5.1%, with a net profit of 1.05 billion RMB, up 17.5% year-on-year [2]. - The company is a leader in the first equipment sector, with a strong market presence in both domestic and international markets, benefiting from accelerated domestic grid expansion and increased overseas investments [5]. - The company is expected to achieve net profits of 1.58 billion RMB, 2.02 billion RMB, and 2.49 billion RMB in 2025, 2026, and 2027 respectively, reflecting growth rates of 50%, 28%, and 23% [5]. Revenue and Profitability - In 2024, the company reported revenue of 92.2 billion RMB from transformers, a 17.8% increase year-on-year, and a gross margin of 14.4%, up 5.9 percentage points [4]. - The switch segment generated revenue of 85.0 billion RMB, an 11.0% increase year-on-year, with a gross margin of 26.5%, up 1.3 percentage points [4]. - The company’s operating cash flow improved significantly, reaching 3.5 billion RMB in 2024, a year-on-year increase of 176.6% [4]. Market Position and Growth - The company holds a leading position in the domestic market, with a 9.3% share in the State Grid's power transmission and transformation projects and a 20.4% share in ultra-high voltage projects [3]. - The company has expanded its international business, signing contracts in countries such as Turkey, Italy, and Sweden, with equipment exports now accounting for over 50% of its international business [3]. - The company’s revenue from the capacitor and lightning arrester segment reached 980 million RMB in 2024, a 22.6% increase year-on-year, with a gross margin of 23.2% [4]. Financial Projections - The company is projected to achieve revenues of 25.52 billion RMB, 30.25 billion RMB, and 33.52 billion RMB in 2025, 2026, and 2027 respectively, with corresponding growth rates of 14.56%, 18.53%, and 10.80% [9]. - The diluted earnings per share are expected to increase from 0.206 RMB in 2024 to 0.485 RMB in 2027 [9]. - The return on equity (ROE) is projected to rise from 4.79% in 2024 to 9.68% in 2027 [9].