BROS(601339) HUAXI Securities·2025-04-29 11:54Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company's Q1 performance exceeded market expectations, with revenue, net profit attributable to shareholders, and operating cash flow showing significant changes. Revenue was 1.731 billion, a year-on-year decrease of 5.63%, while net profit attributable to shareholders increased by 115.95% to 173 million [2] - The improvement in profitability is attributed to the sustained growth in Vietnam's profitability, the domestic turnaround due to the disposal of loss-making factories, and an increase in fair value changes from financial assets and liabilities [2] - The company is expected to benefit from a potential increase in order share if lower tariffs are agreed upon between Vietnam and the US, alongside a gradual end to inventory reduction impacts from previous years [5] Financial Summary - For Q1 2025, the gross margin was 14.86%, up 8.97 percentage points year-on-year, while the net margin was 10.0%, an increase of 5.6 percentage points [3] - The company forecasts revenue for 2025-2027 to be 8.144 billion, 8.648 billion, and 9.158 billion respectively, with net profit predictions of 595 million, 698 million, and 824 million [7][10] - The earnings per share (EPS) for 2025-2027 are projected to be 0.40, 0.47, and 0.55 respectively, with corresponding price-to-earnings (PE) ratios of 12, 10, and 9 [5][10] Inventory and Receivables - As of Q1 2025, inventory increased to 4.764 billion, a year-on-year growth of 2.8%, with inventory turnover days rising to 75 days, an increase of 31 days [4] - Accounts receivable stood at 668 million, with turnover days increasing by 4 days to 35 days [4]