VEICHI(688698) HTSC·2025-04-29 07:50Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - The company reported Q1 2025 revenue of 387 million RMB, representing a year-over-year increase of 18.16% but a quarter-over-quarter decrease of 19.88%. The net profit attributable to the parent company was 57 million RMB, up 5.60% year-over-year and up 63.85% quarter-over-quarter [1] - The company's industrial control business is steadily growing, with a focus on expanding applications in textiles and machine tools, as well as entering new industries such as shipping and ports. The humanoid robot business is also accelerating its layout, indicating potential for continued growth [1][2] Summary by Sections Revenue and Profitability - In Q1 2025, the company's industrial control product revenue was 232 million RMB for variable frequency drives (up 17.95% YoY) and 133 million RMB for servo and control systems (up 9.76% YoY). Digital energy product revenue surged to 10 million RMB, a remarkable increase of 1215.77% YoY [2] - The gross margin for Q1 2025 was 37.71%, down 2.39 percentage points year-over-year but up 1.85 percentage points quarter-over-quarter, primarily due to a higher proportion of lower-margin business from data centers and energy storage projects [3] Cost Management - The company's expense ratio for Q1 2025 was 22.64%, down 1.91 percentage points YoY and down 5.55 percentage points QoQ, reflecting effective cost control measures [3] Business Expansion - The company is expanding vertically in the textile and machine tool sectors, moving from single equipment to multi-link processes. It is also broadening its industry layout domestically and internationally, benefiting from energy-saving renovation trends and exploring new scenarios in the overseas market [4] - The company is investing in robot components such as hollow cup motors and rotary joints, and is establishing joint ventures to accelerate its robot business [4] Profit Forecast and Valuation - The company’s net profit forecast for 2025-2027 is 304 million RMB, 366 million RMB, and 437 million RMB, respectively, with corresponding EPS of 1.44 RMB, 1.73 RMB, and 2.07 RMB [5] - The target price is set at 72.00 RMB, based on a PE ratio of 50 times, which aligns with the industry average [5]