HONGLU(SZ:002541) HTSC·2025-04-20 06:55Investment Rating - The investment rating for the company is "Buy" with a target price of 26.81 RMB [6][7]. Core Views - The company reported a revenue of 21.5 billion RMB for 2024, a decrease of 8.6% year-on-year, and a net profit attributable to shareholders of 772 million RMB, down 34.51% year-on-year. The net profit is in line with expectations [1][4]. - The company is expected to experience a turning point in operations in 2025, benefiting from reduced capital expenditure impacts, a recovery in capacity utilization, and cost reductions from robotic applications [1][4]. - In Q1 2025, the company is projected to have significantly better operational demand than the industry, with new order volume expected to reach 1.37 million tons, an increase of 13.9% year-on-year [1]. Summary by Sections Financial Performance - In 2024, the company signed new contracts worth 28.3 billion RMB, a decrease of 4.76% year-on-year, with a new order volume of 1.37 million tons, reflecting a 3.1% increase year-on-year [2]. - The company's steel structure production in 2024 was 4.51 million tons, a slight increase of 0.51% year-on-year, with a capacity utilization rate of 86.7%, up 0.3 percentage points year-on-year [2]. - The comprehensive gross margin for 2024 was 10.33%, down 0.8 percentage points year-on-year, while Q4 2024 gross margin improved to 10.8% [2]. Profitability and Cash Flow - The company’s net profit margin for 2024 was 3.59%, down 1.4 percentage points year-on-year, with a net cash flow from operating activities of 573 million RMB, a decrease of 5.24 million RMB year-on-year [3]. - The company incurred impairment losses of 60 million RMB in 2024, primarily due to increased accounts receivable, which rose by 800 million RMB to 3.54 billion RMB [3]. Earnings Forecast and Valuation - The forecasted net profit for the company from 2025 to 2027 is expected to be 1.03 billion RMB, 1.22 billion RMB, and 1.4 billion RMB respectively [4][5]. - The company is assigned a PE ratio of 18 times for 2025, with a target price of 26.81 RMB, indicating a favorable outlook compared to peers [4][5].