ADAMA(SZ:000553) EBSCN·2025-05-06 05:17Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company turned profitable in Q1 2025, with a net profit of 1.51 billion yuan, marking a significant recovery from previous losses [1][2]. - The overall gross margin improved significantly due to the reduction in inventory costs, with a year-on-year increase of 2.9 percentage points to 27.2% [2]. - The company's cash flow from operating activities showed a net inflow of -2.07 billion yuan, an improvement of 5.28 billion yuan year-on-year, representing the best level since 2019 [2]. Sales Performance - North America saw a 15% year-on-year increase in sales, driven by strong performance in consumer and professional solutions [3]. - Sales in the Asia-Pacific region decreased by 7%, while China experienced an 8% growth due to recovering global demand [3]. - The Latin America region faced a 23% decline in sales, attributed to intensified competition and unfavorable currency exchange rates [3]. Profit Forecast and Valuation - The profit forecast for 2025-2027 has been revised upwards, with expected net profits of 4.17 billion yuan, 7.09 billion yuan, and 10.28 billion yuan respectively [4]. - The report highlights that the improvement in gross margin and cash flow is expected to continue benefiting from the company's operational enhancements and the recovery of certain product prices [4]. - The estimated P/E ratios for 2025, 2026, and 2027 are 35, 20, and 14 respectively, indicating a positive outlook for the company's valuation [5][12].