M&S ELECTRONICS(688311) Minsheng Securities·2025-04-25 08:19Investment Rating - The report maintains a "Recommended" rating for the company [3][6]. Core Views - The company reported a revenue of 140 million yuan for 2024, a year-on-year decrease of 57.9%, and a net profit attributable to shareholders of -270 million yuan, compared to -60 million yuan in 2023. For Q1 2025, the revenue was 21 million yuan, showing a year-on-year increase of 48% [1][2]. - The company is expected to gradually achieve mass production of electronic countermeasure products, with significant improvements anticipated in the coming years [2][3]. - The company has faced continuous losses over seven quarters due to industry challenges, but the revenue growth in Q1 2025 and a narrowing loss margin suggest a potential turning point [1][2]. Summary by Sections Financial Performance - In 2024, the company experienced a significant decline in revenue and net profit, with a net cash flow from operating activities of -300 million yuan, primarily due to collection issues [3][5]. - The gross margin for 2024 decreased by 24.3 percentage points to 26.0%, attributed to reduced production volumes leading to higher fixed costs per unit [1][3]. Product Segmentation - The company’s revenue from satellite navigation products was 80 million yuan in 2024, down 69.5% year-on-year, while satellite communication products generated 60 million yuan, a decrease of 22.5% [2]. - The electronic countermeasure segment is expected to see growth as the company has secured multiple orders for radar countermeasure products and is moving towards product finalization and mass production [2][3]. Future Projections - The company forecasts net profits attributable to shareholders of 101 million yuan, 174 million yuan, and 299 million yuan for 2025, 2026, and 2027, respectively, with corresponding PE ratios of 60x, 35x, and 20x [3][5]. - The report highlights the company's technological advantages in satellite navigation and breakthroughs in electronic countermeasures as key drivers for future growth [3][5].