Kehua Holdings(SH:603161) Dongxing Securities·2025-05-07 09:52Investment Rating - The report maintains a "Recommended" rating for Kehua Holdings (603161.SH) [6][4]. Core Views - The company's profitability is under pressure due to declining revenue and increased asset impairment provisions, but its balance sheet is continuously improving [1][3]. - The turbocharger industry faces short-term downward risks, yet the company has significant room for market share growth, and the competitive landscape is becoming clearer with fewer new entrants [4][12]. Financial Performance Summary - In Q1 2025, the company achieved revenue of 525.60 million yuan, a year-on-year decrease of 15.17%, and a net profit attributable to shareholders of 25.61 million yuan, down 40.82% year-on-year [1][2]. - The gross margin for Q1 2025 was 16.68%, which is a 2.64 percentage point increase from Q4 2024 but a 2.09 percentage point decrease year-on-year [1]. - The company recorded asset impairment losses of 27.78 million yuan in Q1 2025, accounting for 5.3% of revenue, compared to 1.60 million yuan (2.6% of revenue) in the same period last year [2]. - The operating cash flow for Q1 2025 was 118.69 million yuan, reflecting a 3.9% increase compared to the same period last year [3]. Balance Sheet Improvement - The company's working capital and interest-bearing liabilities have improved, with accounts receivable and inventory decreasing, releasing working capital [3]. - As of Q1 2025, interest-bearing liabilities totaled 714 million yuan, a decrease of 127 million yuan from 2024 [3]. Profit Forecast - The company is expected to achieve net profits of 120 million yuan, 150 million yuan, and 180 million yuan for the years 2025, 2026, and 2027, respectively, with corresponding EPS of 0.64, 0.77, and 0.93 yuan [4][5].