Grace(SH:603256) Tianfeng Securities·2025-05-03 12:23Investment Rating - The report maintains an "Accumulate" rating for the company [6] Core Views - The company has shown a strong performance turnaround, with Q1 2025 profits exceeding the total profits of the previous year, achieving a revenue of 2.46 billion yuan, a year-on-year increase of 29.52% [1][2] - The electronic fabric business has experienced high growth, with a revenue increase of 25% to 780 million yuan in 2024, driven by sales growth and favorable policies [2] - The company is positioned for high-end product development, particularly in LowDK/CTE fields, which is expected to enhance profitability as production capacity increases [2][4] Financial Performance - In 2024, the company achieved a total revenue of 835 million yuan, a year-on-year increase of 26.24%, with a net profit of 23 million yuan, marking a significant recovery from losses [1][5] - The gross profit margin improved significantly, reaching 28% in Q1 2025, up 15.9 percentage points year-on-year [3] - The company’s operating cash flow turned positive in 2024, with a net cash flow of 179 million yuan [3] Profitability Forecast - The forecast for net profit is adjusted upwards, with expected net profits of 150 million yuan in 2025 and 230 million yuan in 2026, reflecting a strong recovery trajectory [4][5] - The company is expected to achieve a gross margin of 30.77% by 2027, indicating a continuous improvement in profitability [5][16] Market Position - The company is recognized for its leading capabilities in high-end electronic fabric manufacturing, which is anticipated to facilitate domestic substitution in high-end markets [4][5] - The company has established partnerships with notable clients in the industry, enhancing its market position and growth potential [2]