Sunrise(SZ:300360) HTSC·2025-04-29 04:15Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of 18.48 RMB [7][8]. Core Views - The company achieved a significant increase in net profit in Q1 2025, with a year-on-year growth of 56.05% and a quarter-on-quarter growth of 42.18%, despite a revenue decline of 7.40% year-on-year [1][2]. - The domestic market is currently experiencing a peak in the smart meter replacement cycle, which is expected to drive demand for electric meters [1][4]. - The company is successfully expanding its overseas market, with a 56.04% year-on-year increase in overseas revenue in 2024 [3][4]. Summary by Sections Financial Performance - In Q1 2025, the company reported revenues of 433 million RMB, a decrease of 7.40% year-on-year and a decrease of 10.29% quarter-on-quarter. The net profit attributable to the parent company was 175 million RMB, reflecting a year-on-year increase of 56.05% and a quarter-on-quarter increase of 42.18% [1]. - The gross and net profit margins for Q1 2025 were 42.52% and 40.67%, respectively, showing improvements of 1.13% and 17.36% year-on-year [2]. - The company’s expense ratio for Q1 2025 was 5.00%, with significant reductions in financial expenses due to increased bank deposit interest [2]. Market Outlook - The smart metering and collection system is the main source of revenue and profit for the company, with a revenue of 1.641 billion RMB in 2024, up 14.31% year-on-year [4]. - The company is well-positioned to benefit from the ongoing smart meter replacement cycle, which is expected to last until 2026 [4]. Profit Forecast and Valuation - The company’s projected net profits for 2025-2027 are 794 million RMB, 899 million RMB, and 989 million RMB, respectively, with corresponding EPS of 1.54, 1.75, and 1.92 RMB [5][6]. - The report assigns a PE ratio of 12 times for 2025, reflecting the company's strong overseas market growth potential [5].