CATEC(600879) Changjiang Securities·2025-05-08 10:13Investment Rating - The investment rating for the company is "Buy" and is maintained [8] Core Views - The company experienced a significant decline in revenue and net profit in Q1 2025, with revenue dropping by 55.41% year-on-year to 1.7 billion and net profit decreasing by 79.22% to 30 million [2][5] - The decline in performance is attributed to delays in the delivery of aerospace products and extended customer settlement times, which affected revenue recognition [2][10] - Despite the challenges, the company achieved a sales gross margin of 26.61% in Q1 2025, marking the second-highest quarterly margin since its asset injection in 2016 [2][10] - The company is expected to benefit from a gradual recovery in product delivery and customer settlement rhythms, leading to improved future performance [2][10] Summary by Sections Financial Performance - In Q1 2025, the company reported total revenue of 1.7 billion, a decrease of 55.41% year-on-year and 66.31% quarter-on-quarter [5] - The net profit attributable to the parent company was 30 million, down 79.22% year-on-year, but showed a turnaround from a loss in Q4 2024 [5][10] - The company’s non-recurring net profit was 15 million, reflecting an 88.03% year-on-year decline [5] Operational Insights - The company’s aerospace product delivery schedules were impacted, with some subsidiaries experiencing significant revenue declines, such as Aerospace Feihong, which saw an 86.29% drop due to project delays [10] - The company has focused on lean management and core business, which contributed to maintaining a relatively high gross margin despite revenue challenges [10] Future Outlook - The company anticipates a gradual easing of the delays affecting product delivery and customer settlements starting from June 2025 and into the second half of the year [10] - Projections for net profit from 2025 to 2027 are 651 million, 803 million, and 1.113 billion respectively, with expected growth rates of 19%, 23%, and 39% [10]