Longhua Technology(SZ:300263) HTSC·2025-04-24 09:30Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of 8.92 RMB [6][7]. Core Views - The company reported a revenue of 2.711 billion RMB in 2024, representing a year-over-year increase of 9.87%, and a net profit attributable to the parent company of 131 million RMB, up 3.37% year-over-year, although below previous expectations due to poor performance in the energy-saving and environmental protection business [1][2]. - The new materials business is actively expanding into sectors such as renewable energy, military, and rail transit, which is expected to improve profitability year-over-year [1][3]. - The company has seen significant growth in its new materials segment, with revenue from target materials and ultra-high temperature special functional materials increasing by 43.38% and 3.94% respectively in 2024, leading to a gross profit increase of 63.73% and 22.75% [2][3]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 2.711 billion RMB, with a year-over-year growth of 9.87% and a net profit of 131 million RMB, reflecting a 3.37% increase [5]. - For Q1 2025, the company reported a revenue of 639 million RMB, a slight decrease of 0.46% year-over-year, and a net profit of 45 million RMB, down 18.11% year-over-year [1][2]. Business Segments - The new materials business has shown strong growth, with a gross profit margin increase to 45.19%, up 12.09 percentage points year-over-year, driven by increased orders [2]. - The energy-saving and environmental protection business has faced challenges, with stable revenue but a gross profit decline of 15.03% in 2024 [2][3]. Valuation and Estimates - The estimated EPS for 2025 is adjusted to 0.26 RMB, with a projected PE ratio of 24.7x for the company, reflecting a positive outlook on the transformation and growth potential of the materials business [4][5]. - The target price of 8.92 RMB corresponds to a PE valuation of 24.7x for 2025, indicating an increase from the previous target price of 8.59 RMB [4][6].