Kewell(SH:688551) China Post Securities·2025-05-08 03:23Investment Rating - The report maintains a "Buy" rating for the company, with an expected relative increase in stock price between 10% and 20% over the next six months [6][12]. Core Views - The company reported a revenue of 480 million yuan in 2024, a year-on-year decrease of 9.6%, and a net profit attributable to shareholders of 50 million yuan, down 58.1% year-on-year. The decline in performance is attributed to intensified market competition, delayed order deliveries, and increased investments in market expansion [4][5]. - The first quarter of 2025 showed a slight recovery with revenue of 110 million yuan, a year-on-year decrease of 3.6%, and a net profit of 20 million yuan, an increase of 11.3% year-on-year [4][5]. - The testing power business generated revenue of 360 million yuan in 2024, a slight increase of 0.9%, but faced pressure on profit margins due to fierce competition. The company anticipates a recovery in this segment as overseas markets and distribution channels are further developed [5][6]. - The hydrogen energy testing equipment business underperformed with revenue of 100 million yuan in 2024, down 15.1% year-on-year. The report suggests that the development of the hydrogen energy industry and the establishment of standards will take time, but policy support is expected to enhance industry prospects [5][6]. Financial Forecasts - Revenue projections for 2025, 2026, and 2027 are 550 million yuan, 660 million yuan, and 840 million yuan, respectively. Corresponding net profits are forecasted at 70 million yuan, 90 million yuan, and 130 million yuan, leading to price-to-earnings ratios of 34, 25, and 18 times [6][10]. - The report indicates a gradual improvement in profitability, with a projected net profit margin increase from 10.3% in 2024 to 15.3% in 2027 [11]. Key Financial Metrics - The company’s asset-liability ratio stands at 24.0%, indicating a relatively low level of debt [3][11]. - The earnings per share (EPS) is expected to rise from 0.58 yuan in 2024 to 1.53 yuan in 2027, reflecting the anticipated growth in profitability [10][11]. - The report highlights a decrease in expense ratios, contributing to improved net profit margins in the first quarter of 2025 [5].