China XD(SH:601179) Huaan Securities·2025-04-17 11:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown significant improvement in profitability and optimization of its business structure, with a notable increase in gross margin [1][5] - In 2024, the company achieved a revenue of 22.175 billion yuan, a year-on-year increase of 5.59%, and a net profit attributable to shareholders of 1.054 billion yuan, up 17.50% year-on-year [4][5] - The first quarter of 2025 saw a revenue of 5.245 billion yuan, representing an 11.27% year-on-year growth, with a net profit of 295 million yuan, up 42.10% year-on-year [4][5] Financial Performance Summary - The company’s revenue by business segment in 2024 included: - Switches: 8.504 billion yuan, up 10.97%, with a gross margin of 26.52% - Transformers: 9.218 billion yuan, up 10.26%, with a gross margin of 14.35% - Capacitors and surge protectors: 985 million yuan, up 20.28%, with a gross margin of 23.20% - R&D and testing: 665 million yuan, up 2.52%, with a gross margin of 51.73% [5] - The company is expected to achieve net profits of 1.697 billion yuan, 2.006 billion yuan, and 2.369 billion yuan for the years 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 19, 16, and 13 [6][8] Key Financial Indicators - For 2024, the company reported a gross margin of 20.75%, which improved by 2.92 percentage points year-on-year, and for Q1 2025, the gross margin was 21.02%, an increase of 3.17 percentage points year-on-year [4][5] - The projected revenue growth rates for the next few years are 14.1% for 2025, 13.1% for 2026, and 13.1% for 2027 [8] - The return on equity (ROE) is expected to rise from 4.8% in 2024 to 8.4% in 2027 [8]