Warom Incorporated(SH:603855) HTSC·2025-04-30 06:15Investment Rating - The report maintains a "Buy" rating for the company with a target price of 29.64 RMB [8][9]. Core Views - The company reported a significant year-on-year improvement in Q1 2025, with revenue of 798 million RMB, up 23.99%, and a net profit attributable to shareholders of 116 million RMB, up 36.58% [1]. - The company is actively expanding into emerging fields and overseas markets, which is expected to sustain profit growth in 2025 [1]. - The company is a leader in the domestic explosion-proof electrical equipment sector, leveraging technical advantages and certifications to create high barriers to entry [3]. - The company is strategically positioning itself in the explosion-proof robot sector, collaborating with Tianchuang Robotics to develop advanced products [4]. - Profitability is gradually improving, with a gross margin of 49.36% in Q1 2025, despite a slight year-on-year decline [2]. Summary by Sections Financial Performance - In Q1 2025, the company achieved a revenue of 798 million RMB, with a year-on-year increase of 23.99% and a quarter-on-quarter decrease of 47.31%. The net profit attributable to shareholders was 116 million RMB, reflecting a year-on-year increase of 36.58% [1]. - The gross margin for Q1 2025 was 49.36%, showing a year-on-year decrease of 3.86 percentage points but an improvement of 8.19 percentage points quarter-on-quarter [2]. Business Strategy - The company is diversifying its revenue streams by increasing its presence in emerging sectors such as food, medicine, military, nuclear power, and marine engineering, which now account for 20% of its revenue [3]. - The company is also expanding its international footprint, with overseas revenue contributing nearly 24% of total revenue in 2024, amounting to 944 million RMB, a year-on-year increase of 35% [3]. Future Outlook - The company forecasts net profits of 525.25 million RMB, 613.39 million RMB, and 775.87 million RMB for 2025, 2026, and 2027 respectively, with growth rates of 14%, 17%, and 27% [5]. - The report emphasizes the company's strong position to benefit from the accelerating trend of industrial safety automation and its significant technological barriers [5].