PRCO(002225) China Post Securities·2025-05-15 07:45Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [2]. Core Views - The company reported a revenue of 5.192 billion yuan in 2024, a year-on-year decrease of 5.13%, and a net profit attributable to shareholders of 135 million yuan, down 45.48% [5][13]. - The decline in performance is attributed to weak domestic demand, intensified competition, and increased shipping costs due to complex overseas situations [5][13]. - The company has successfully expanded its overseas business, with foreign revenue reaching 1.455 billion yuan in 2024, accounting for 28% of total revenue [6][15]. - The active magnesium oxide market presents significant growth potential, with the company focusing on high-efficiency precipitation agents for nickel and cobalt extraction [7][20]. Summary by Sections Company Overview - The latest closing price is 5.52 yuan, with a total market capitalization of 5.6 billion yuan [4]. - The company has a total share capital of 1.01 billion shares, with a debt-to-asset ratio of 57.4% and a price-to-earnings ratio of 39.43 [4]. Financial Performance - In Q1 2025, the company achieved a revenue of 1.34 billion yuan, a year-on-year increase of 3.17%, while net profit decreased by 15.91% [5][13]. - The company anticipates revenues of 5.774 billion yuan in 2025, with a year-on-year growth of 11.21%, and net profits of 321 million yuan, reflecting a growth of 137.39% [7][23]. Market Expansion - The company has established factories in the United States and Serbia, with the U.S. factory's sales revenue increasing by 72% in 2024 [6][18]. - The foreign gross margin was 28.67% in 2024, significantly higher than the domestic gross margin of 15.21% [17]. Growth Opportunities - The active magnesium oxide market is expected to grow, with the company planning to increase its production capacity to 45,000 tons per year in the long term [21]. - The company has successfully entered the supply chain for several wet metallurgy clients, including Greenmech, and is recognized as a qualified supplier [20][21].