China XD(SH:601179) Huaxin Securities·2025-04-21 08:12Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of the stock [10]. Core Views - The company has exceeded expectations in Q1 2025, benefiting from high demand in the ultra-high voltage sector [6][10]. - The company's revenue and profitability are expected to improve significantly due to the increasing proportion of high-margin products [6][10]. - The report highlights the company's strong market position in both internal and external markets, with significant breakthroughs in various projects [7][10]. - The investment outlook for the power grid remains positive, with expectations of a peak year for ultra-high voltage projects in 2025 [9][10]. Summary by Sections Financial Performance - In 2024, the company achieved revenue of 22.175 billion yuan, a year-on-year increase of 5.59%, and a net profit of 1.054 billion yuan, up 17.50% [5]. - For Q1 2025, the company reported revenue of 5.245 billion yuan, a year-on-year growth of 11.27%, and a net profit of 295 million yuan, up 42.10% [5]. Product Performance - The company's main business revenue for 2024 was 21.827 billion yuan, with a gross margin of 20.70%, an increase of 2.91 percentage points year-on-year [6]. - Revenue from transformers reached 9.218 billion yuan, growing 17.8% year-on-year, with a gross margin of 14.35% [6]. - The revenue from switches was 8.504 billion yuan, up 10.97%, with a gross margin of 26.52% [6]. Market Position - The company maintains the highest market share in the State Grid's centralized procurement market, achieving record high bidding volumes and market share [7]. - The company has made significant inroads into external markets, winning contracts in nuclear power and offshore wind power sectors [7]. Investment Outlook - The report forecasts the company's revenue for 2025-2027 to be 26.814 billion, 30.760 billion, and 34.670 billion yuan respectively, with corresponding EPS of 0.33, 0.40, and 0.46 yuan [10][12]. - The company is positioned to benefit from sustained high demand in the power grid investment sector, particularly in ultra-high voltage projects [9][10].