SUMEC(SH:600710) Shenwan Hongyuan Securities·2025-07-18 05:45Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong performance relative to the market [6]. Core Insights - The company's H1 2025 performance exceeded expectations, with revenue of 55.1 billion yuan, a year-on-year decrease of 1.5%, and a net profit attributable to shareholders of 650 million yuan, a year-on-year increase of 13% [6]. - The shipbuilding segment is showing gradual profit release, with a total profit increase of 98% year-on-year in H1 2025. The company has a strong order backlog of approximately 3.3 billion USD, ensuring revenue visibility [6]. - The diesel generator business is expected to benefit from demand growth due to AIDC expansion, highlighting the business's resilience and potential for profit growth [6]. - The company has a diversified business model and a global operational network, which helps mitigate risks associated with market fluctuations. The apparel segment saw a 49% year-on-year increase in exports in H1 2025 [6]. - The dividend yield is projected to be around 4.3% for 2025, providing a competitive edge [6]. - The profit forecast for 2025-2027 has been revised upwards, with net profit estimates of 1.35 billion, 1.48 billion, and 1.61 billion yuan respectively, reflecting improved profitability in the shipbuilding sector [6]. Financial Data and Profit Forecast - Total revenue for 2024 is projected at 117.174 billion yuan, with a slight decline of 1.6% expected in 2025. Net profit for 2025 is estimated at 1.349 billion yuan, representing a 17.5% increase year-on-year [2]. - The company's gross margin is expected to improve from 7.4% in 2025 to 7.9% by 2027, indicating better cost management and pricing power [2]. - The return on equity (ROE) is projected to be 16.2% in 2025, reflecting strong profitability relative to shareholder equity [2]. Market Data - As of July 17, 2025, the company's closing price was 10.03 yuan, with a market capitalization of 13.107 billion yuan. The price-to-earnings (P/E) ratio is projected to decrease from 11 in 2024 to 8 by 2027, indicating potential undervaluation [3].