Avary Holding(SZ:002938) HTSC·2025-04-30 06:48Investment Rating - The report maintains a "Buy" rating for the company with a target price of 40.26 RMB [7][8]. Core Insights - In Q1 2025, the company achieved a record revenue of 8.087 billion RMB, representing a year-over-year increase of 20.94%, while the net profit was 488 million RMB, down 1.83% year-over-year. The revenue growth was attributed to new product launches from major clients and early inventory buildup by some customers. However, profit margins were pressured by rising costs and short-term depreciation [1][2]. - The company is expected to benefit from long-term opportunities driven by AI, including advancements in consumer electronics and the automotive sector. The release of new capacities in automotive and server fields is anticipated to become a new growth driver [1][3]. - The report highlights that the company's gross margin in Q1 2025 was 17.83%, down 2.54 percentage points year-over-year, and the net margin was 6.01%, down 1.42 percentage points year-over-year. The decline in profit margins is attributed to increased capital expenditures and rising material prices [2][3]. Summary by Sections Financial Performance - Q1 2025 revenue reached 8.087 billion RMB, a record for the same period, with a year-over-year growth of 20.94%. Net profit was 488 million RMB, reflecting a slight decline of 1.83% year-over-year. The gross margin was 17.83%, and the net margin was 6.01% [1][2][3]. - The company forecasts revenue growth for 2025 to be 38.227 billion RMB, with net profit expected to reach 4.249 billion RMB, indicating a growth rate of 17.36% [6][35]. Market Outlook - The company is well-positioned to capitalize on the AI-driven upgrade in consumer electronics, including AI smartphones, AIPC, foldable screens, and AI glasses. The establishment of new high-end production capacities is expected to support this growth [3][4]. - The report anticipates that the company's profitability will improve as the industry enters a peak season in the second half of the year, with increased production capacity and operational efficiency [2][3]. Valuation - The target price of 40.26 RMB is based on a projected PE ratio of 22 times for 2025, reflecting the company's growth prospects in AI and cloud products [4][8]. - The report adjusts the net profit forecast for 2025-2027 to 4.249 billion RMB, 5.160 billion RMB, and 5.948 billion RMB, respectively, with a slight downward adjustment for 2025 [4][6].