L&K(SH:603929) Tianfeng Securities·2025-07-25 07:14Investment Rating - The investment rating for the company is "Buy" with a target price not specified [7][18]. Core Views - The company experienced a temporary decline in mid-year performance but is expected to release significant potential due to a strong order backlog [1][2]. - The company has secured two large orders this year, totaling approximately 47.45 billion, indicating a positive outlook for the Singapore market and continued order fulfillment [2]. - The gross margin has improved significantly, and cash flow remains at a healthy level, with a net cash inflow of 877 million in the first half of 2025 [3]. - The company plans to distribute a cash dividend of 213 million for the first half of 2025, maintaining a strong commitment to shareholder returns [4]. Financial Performance Summary - For the first half of 2025, the company reported revenue of 1.683 billion, a year-on-year decrease of 41%, and a net profit of 161 million, down 32% [1]. - The gross margin for the first half of 2025 was 16.9%, an increase of 5.89 percentage points year-on-year, with a net profit margin of 9.63%, up 1.34 percentage points [3]. - The company’s operating cash flow for the first half of 2025 was 877 million, a decrease of 282 million year-on-year, with a cash collection ratio of 145% [3]. Order Backlog and Market Outlook - As of mid-2025, the company has an uncompleted contract amount of 6.1 billion, indicating a robust order backlog [2]. - The company is optimistic about the semiconductor industry in Southeast Asia, driven by increased demand from AI applications [4]. Financial Projections - The projected net profits for 2025-2027 are 528 million, 797 million, and 844 million respectively, with corresponding P/E ratios of 15, 10, and 9.6 [4]. - The company’s revenue is expected to grow significantly in 2024, with a projected increase of 68.09% [6].