topstar(SZ:300607) CSC SECURITIES (HK) LTD·2025-06-24 07:30Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [7]. Core Views - The company is deeply engaged in the industrial robot and five-axis CNC machine sectors, leveraging its strong foundation in high-end manufacturing. It is actively entering the embodied intelligence field through collaboration with Huawei, showcasing its new X5 robot motion control platform [7]. - The company is currently undergoing a transformation phase, with a strategic focus on product-oriented business as a future growth driver. Despite a significant revenue decline in 2024, the gross margin improved, indicating potential for recovery [7]. - Future earnings are projected to improve significantly, with net profits expected to reach RMB 0.4 billion in 2025, RMB 0.8 billion in 2026, and RMB 1.3 billion in 2027, reflecting a strong growth trajectory [7][9]. Summary by Sections Company Overview - The company operates in the machinery equipment sector, with a current A-share price of RMB 31.97 and a target price of RMB 38 [1]. - The company has a market capitalization of RMB 10.796 billion and a total share count of approximately 477 million [1]. Recent Ratings - The most recent rating was published on November 15, 2024, with a closing price of RMB 21.35 and a "Buy" recommendation [2]. Product Portfolio - The company's product mix includes industrial robots (9.6%), injection molding machines and supporting equipment (17.8%), CNC machine tools (10.7%), automation application systems (16.7%), and intelligent energy and environmental management systems (42.8%) [2]. Financial Performance - In 2024, the company reported revenue of RMB 2.872 billion, a year-over-year decline of 36.9%, and a net loss of RMB 245 million [9]. - The company’s revenue for Q1 2025 was RMB 360 million, down 63.8% year-over-year, but the gross margin improved by 14.8 percentage points to 32.1% [7]. Earnings Forecast - The forecast for net profit shows a recovery starting in 2025, with expected earnings per share (EPS) of RMB 0.09, RMB 0.16, and RMB 0.27 for 2025, 2026, and 2027 respectively [9]. - The projected price-to-earnings (P/E) ratios for 2026 and 2027 are 200 times and 118 times, respectively, indicating high growth expectations [9].