L&K(SH:603929) Changjiang Securities·2025-04-29 08:13Investment Rating - The investment rating for the company is "Buy" and is maintained [11]. Core Views - The company reported a decline in revenue and net profit for Q1 2025, with revenue at 835 million yuan, down 23.83% year-on-year, and net profit at 82 million yuan, down 29.82% year-on-year [2][8]. - Despite the decline in revenue, the company has a substantial backlog of orders, with a total order amount of 3.031 billion yuan as of the end of 2024, which is expected to increase significantly with the recent contract win of 3.163 billion yuan from VisionPower Semiconductor Manufacturing Company [13][8]. - The company's cash flow has improved significantly due to advance payments from the VSMC project, with net cash inflow from operating activities reaching 910 million yuan, an increase of 244 million yuan year-on-year [13][8]. Summary by Sections Financial Performance - Q1 2025 revenue was 835 million yuan, a decrease of 23.83% year-on-year; net profit was 82 million yuan, down 29.82% year-on-year; and non-recurring net profit was also 82 million yuan, down 29.95% year-on-year [2][8]. - The comprehensive gross margin for Q1 was 13.35%, an increase of 0.82 percentage points year-on-year, while the net profit margin decreased to 9.82%, down 0.84 percentage points year-on-year [13][8]. Order Backlog and Future Prospects - The company secured a major contract worth approximately 3.163 billion yuan for MEP engineering services, which is expected to enhance its order backlog significantly [13][8]. - The company maintains optimistic prospects for both domestic and international projects, with ongoing collaborations with major semiconductor manufacturers [13][8]. Cash Flow and Financial Health - The company reported a net cash inflow from operating activities of 910 million yuan, reflecting a strong cash position bolstered by advance payments from projects [13][8]. - The asset-liability ratio increased to 60.86%, up 1.72 percentage points year-on-year, indicating a slight increase in financial leverage [13][8].