Koal(SH:603232) HTSC·2025-04-27 09:08Investment Rating - The report maintains a "Buy" rating for the company with a target price of 16.00 RMB [8][9]. Core Views - The company's revenue for 2024 was 529.28 million RMB, a year-over-year decrease of 5.71%, while the net profit attributable to the parent company was 36.81 million RMB, a slight decrease of 0.42%. However, the non-recurring net profit increased significantly by 233.45% to 15.69 million RMB, indicating a shift towards higher-margin business segments [1][2]. - The company is expected to recover its performance in 2025, driven by the expansion into new industry clients such as judiciary, telecommunications, and tobacco, as well as overseas clients along the Belt and Road Initiative [1][3]. Summary by Sections Financial Performance - In 2024, the company's revenue from PKI infrastructure products, PKI security application products, and general security products was 1.58 billion RMB, 2.48 billion RMB, and 1.23 billion RMB respectively, showing year-over-year growth of 41.41%, 10.64%, and a decline of 45.28% [2]. - The overall gross margin improved by 4.52 percentage points to 51.99% due to the increased revenue share from high-margin businesses [2]. Business Opportunities - The company is focusing on new security scenarios such as quantum security and AI security, and has made significant progress in product development [3]. - New industry clients are expected to contribute to sustained growth in 2025, with successful projects like the digital trust system in Algeria indicating potential for international expansion [3]. Earnings Forecast and Valuation - The revenue projections for 2025, 2026, and 2027 are 642.05 million RMB, 774.72 million RMB, and 919.08 million RMB respectively, with corresponding EPS estimates of 0.37 RMB, 0.54 RMB, and 0.74 RMB [5][7]. - The report adjusts the revenue and profit forecasts downward due to the transition period affecting low-margin businesses, but maintains a target price based on a 43.3x PE ratio for 2025 [5].