NANCAL(SH:603859) HTSC·2025-04-25 11:10Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 46.77 [8][9]. Core Views - The commercialization of AI Agent is expected to drive revenue growth in 2025, with a projected increase in revenue due to the gradual rollout of AI products [1][4]. - The company experienced a revenue decline in Q1 2025, primarily due to delays in the delivery of industrial electrical products, but anticipates a recovery as downstream demand improves [2]. - AI business performance has shown significant growth, with AI products and services revenue increasing by 1255.99% year-on-year in 2024, indicating enhanced product capabilities [3]. Summary by Sections Financial Performance - In 2024, the company achieved revenue of RMB 1.51 billion, a year-on-year increase of 7.47%, while net profit attributable to shareholders was RMB 191.73 million, a decrease of 15.17% [1][7]. - For Q4 2024, revenue reached RMB 474 million, marking a year-on-year increase of 48.00% [1]. - The company expects revenue growth to accelerate in 2025, driven by the commercialization of AI Agent products [5]. Revenue and Profit Forecast - The forecast for 2025-2026 net profit has been adjusted downwards by 12.0% and 18.6% to RMB 253.36 million and RMB 295.86 million, respectively [5]. - The expected earnings per share (EPS) for 2025 is RMB 1.04, with a projected increase to RMB 1.33 by 2027 [5][7]. Market Position and Valuation - The company is positioned to benefit from the ongoing transformation towards productization and cloud services, with a target price adjustment reflecting a favorable valuation compared to peers [5][9]. - The average price-to-earnings (PE) ratio for comparable companies is 45.0x for 2025, and the report assigns the same PE multiple to the company [5][17].