Arctech Solar(SH:688408) Changjiang Securities·2025-05-05 13:15Investment Rating - The report maintains a "Buy" rating for the company [6][7]. Core Views - The company reported a revenue of 1.559 billion yuan in Q1 2025, a year-on-year decrease of 14%, and a net profit attributable to shareholders of 110 million yuan, down 28% year-on-year [2][4]. - The company has a strong order backlog of 7.4 billion yuan at the end of Q1, which represents a quarter-on-quarter increase of 2.75 billion yuan, indicating good signing progress and a promising outlook for Q2 and Q3 [11]. - The company is expected to achieve a net profit of 900 million yuan in 2025, corresponding to a valuation of only 11 times [6]. Summary by Sections Financial Performance - Q1 revenue was 1.559 billion yuan, down 14% year-on-year; net profit was 110 million yuan, down 28% year-on-year [2][4]. - The gross margin for Q1 was 18.90%, with a period expense ratio of 12.31%, which increased by 2.74 percentage points year-on-year and 5.56 percentage points quarter-on-quarter [11]. - The company recorded asset impairment losses of 26 million yuan and a credit impairment reversal of 35 million yuan [11]. Order Backlog and Market Position - The order backlog at the end of Q1 was 7.4 billion yuan, with significant contributions from tracking brackets (5.2 billion yuan) and fixed brackets (1.9 billion yuan) [11]. - The company benefits from a strong position in the Middle East and Indian markets, capitalizing on the surge in demand for ground power stations [11]. Future Outlook - The company is expected to see high growth in performance supported by a robust order backlog and effective localization strategies [11]. - The penetration rate of tracking brackets is anticipated to continue improving, alongside cost reduction and efficiency enhancement measures [11]. - The investment in a zero-carbon headquarters project aims to enhance the company's capabilities in "tracking+" and "green electricity+" system solutions [11].