Azure(SZ:002245) CMS·2025-08-10 05:33Investment Rating - The report maintains a rating of "Add" for the company with a target valuation of 19.00 - 22.00 CNY, while the current stock price is 15.89 CNY [3]. Core Views - The company's performance is improving, with a significant expected increase in net profit for the first half of 2025, projected to be between 300 million to 360 million CNY, representing a year-on-year growth of 79%-115% and 156%-204% for non-recurring net profit [1]. - The company is experiencing robust growth in its core business, particularly in the electric tool market, with overseas orders increasing, and is expected to see overseas revenue contribution rise above 50% [10][11]. - The BBU (Battery Backup Unit) business is anticipated to yield excellent returns due to the rapid application of AI computing power, with the company actively entering this market and beginning shipments [7][27]. Financial Data and Valuation - The company forecasts total revenue of 52.22 billion CNY for 2023, with a projected growth rate of 29% in 2024 and 21% in 2025 [2][37]. - The estimated net profit for 2025 is 759 million CNY, with a year-on-year growth of 56% [2][30]. - The company’s earnings per share (EPS) is expected to increase from 0.12 CNY in 2023 to 0.66 CNY in 2025 [2][38]. Business Analysis - The company has shipped approximately 310 million battery units in the first half of the year, with Q2 shipments reaching 170-180 million units, a year-on-year increase of 70% [11]. - The introduction of new products, particularly the full-tab cylindrical cells, is expected to enhance competitiveness in the BBU market, with the company already beginning to ship these products [27][28]. - The LED business has shown significant recovery, contributing over 50 million CNY in profit in Q2, with expectations for continued growth [10][11]. Profitability and Growth - The company’s operating profit is projected to recover significantly, with estimates of 954 million CNY in 2025, reflecting a 60% year-on-year increase [2][37]. - The gross margin is expected to improve from 12.8% in 2023 to 21.0% in 2025, indicating enhanced profitability [38]. - The company is focusing on expanding its market share in new applications such as BBU, robotics, and low-altitude sectors, which are expected to drive future growth [7][10].