PRCO(SZ:002225) Tianfeng Securities·2025-04-30 09:13Investment Rating - The investment rating for the company is "Accumulate" [5] Core Views - The company is expected to gradually improve its performance in 2025, with Q1 revenue of 1.34 billion yuan, a year-on-year increase of 3.17%, and a net profit attributable to shareholders of 55 million yuan, a year-on-year decrease of 15.91% [1] - The company is benefiting from increased orders from its US factory and has positive price expectations for US refractory materials due to tariff implementation [1] - The company has made significant progress in the wet metallurgy sector, which is expected to contribute over 100 million yuan to net profit this year [3] Financial Performance - In Q1 2025, the company achieved a gross margin of 17.95%, a decrease of 1.75 percentage points year-on-year, while the net profit margin was 4.16%, down 0.73 percentage points year-on-year [2] - The company reported a decrease in operating cash flow, with a net outflow of 32 million yuan in Q1, primarily due to increased tax payments and cash purchases [2] - The company’s revenue is projected to grow from 5.19 billion yuan in 2024 to 6.01 billion yuan in 2025, representing a growth rate of 15.69% [4] Business Outlook - The domestic refractory materials business faces pressure due to weak demand in the steel sector, but overseas operations and wet metallurgy are expected to provide profit stability [3] - The company’s overseas revenue accounted for 28% in 2024, with production in the US and Serbia ramping up, enhancing international competitiveness [3] - The company is expanding its active magnesium oxide production capacity, with a new 60,000-ton production line expected to come online soon [3]