Hsino Tower (SH:601096) Changjiang Securities·2025-04-20 10:14Investment Rating - The investment rating for the company is "Buy" and it is maintained [6]. Core Views - The company reported a significant increase in gross margin and rapid profit growth for 2024, with total revenue reaching 10.14 billion yuan, up 9.1% year-on-year, and net profit attributable to shareholders of 230 million yuan, up 85.5% year-on-year [2][4]. - The revenue growth is primarily driven by domestic power grid construction, with domestic revenue at 9.528 billion yuan, up 10.5% year-on-year, while overseas revenue was 369 million yuan, down 8.5% year-on-year [10]. - The gross margin for 2024 was 8.89%, an increase of 1.35 percentage points year-on-year, attributed to a higher proportion of high-margin products and cost reduction measures [10]. - The company expects to deliver a strong performance in 2025, with projected net profit reaching 360 million yuan, corresponding to a PE ratio of approximately 30 times [10]. Financial Performance - For Q4 2024, the company reported revenue of 2.56 billion yuan, down 5.7% year-on-year but up 5.0% quarter-on-quarter, with net profit of 50 million yuan, up 47.3% year-on-year [2][4]. - The company maintained a healthy operating cash flow of 903 million yuan for the year, with Q4 showing a significant increase of 19.1% year-on-year [10]. - The total inventory at the end of 2024 was 2.292 billion yuan, down 12.9% year-on-year, indicating effective inventory management [10]. Cost and Expense Management - The company achieved a reduction in the four expense ratios to 5.39% for the year, with a notable decrease in R&D expense ratio in Q4 [10]. - The gross margin improvement is also linked to production process innovations and optimized procurement strategies [10]. Market Outlook - The company has a substantial backlog of ultra-high voltage orders, indicating a strong market position and potential for growth in 2025 [10].