Shanghai Friendess(SH:688188) Guotou Securities·2025-04-28 09:03Investment Rating - The investment rating for the company is "Buy-A" with a target price of 208.80 CNY, maintaining the rating [4]. Core Views - The company has reported significant growth in both revenue and profit, with Q1 2025 revenue reaching 496 million CNY, a year-on-year increase of 30.12%, and net profit of 255 million CNY, up 31.99% year-on-year [1][2]. - The growth is attributed to the increasing domestic demand for high-power thick plate cutting and the expansion of overseas application scenarios. The company is enhancing its industry solutions and maintaining a high profit margin [2]. - The company is expected to continue its growth trajectory, particularly in the welding business, which is anticipated to create a new growth curve [2]. Revenue and Profit Breakdown - The revenue and profit growth can be segmented by product: - Flat solutions (2D sheet metal processing) are projected to generate 1.125 billion CNY in 2024, up 11.83% year-on-year, with a gross margin of 82.69% [2]. - Pipe solutions (used in construction, fitness equipment, office furniture) are expected to reach 380 million CNY in 2024, a 38.19% increase, with a gross margin of 87.54% [2]. - 3D solutions (for high-power applications like automotive and aerospace) are forecasted to achieve 37 million CNY in 2024, a staggering 409.90% increase, with a gross margin of 80.67% [2]. - Cutting heads (operated by Shanghai Bochi) are expected to generate 495 million CNY in 2024, up 43.71% [2]. - Smart welding is progressing well, with applications in various downstream sectors, including construction steel structures [2]. Profitability and Cost Control - The company's gross margin for Q1 2025 was 77.76%, a decrease of 1.55 percentage points year-on-year, while the net margin was 52.25%, down 1.50 percentage points year-on-year. The fluctuation in gross margin is primarily due to changes in product mix [3]. - The company maintained good cost control, with a total expense ratio of 22.50% in Q1 2025, down 2.40 percentage points year-on-year [8]. Financial Projections - Revenue projections for 2025-2027 are 2.105 billion CNY, 2.697 billion CNY, and 3.411 billion CNY, representing year-on-year growth rates of 21.30%, 28.10%, and 26.51% respectively. Net profits are projected to be 1.074 billion CNY, 1.368 billion CNY, and 1.708 billion CNY, with corresponding growth rates of 21.72%, 27.31%, and 24.86% [8][10].