XJEC(SZ:000400) EBSCN·2025-08-22 02:45Investment Rating - The report maintains a "Buy" rating for the company [3]. Core Views - The company's revenue for the first half of 2025 was 6.447 billion yuan, a year-on-year decrease of 5.68%, while the net profit attributable to shareholders was 634 million yuan, an increase of 0.96%. The gross margin rose by 2.85 percentage points to 23.75%, and the net profit margin increased by 0.43 percentage points to 11.01% [1]. - The company's direct current transmission system business saw significant growth, with revenue increasing by 211.71% year-on-year to 460 million yuan in the first half of 2025, driven by the ongoing construction of ultra-high voltage projects in China [1]. - The company is actively expanding its international market presence, with international business revenue growing by 72.68% year-on-year to 255 million yuan in the first half of 2025 [3]. Summary by Sections Financial Performance - In Q2 2025, the company achieved revenue of 4.099 billion yuan, a year-on-year increase of 1.81%, and a net profit of 426 million yuan, up 9.12% year-on-year and 105.38% quarter-on-quarter [1]. - The company's various business segments experienced mixed performance, with the smart distribution and transmission system revenue decreasing by 13.01% to 1.847 billion yuan, while the revenue from charging and swapping equipment increased by 4.92% to 577 million yuan [2]. Market Outlook - The report highlights that China's investment in power grid projects increased by 14.6% year-on-year to 291.1 billion yuan in the first half of 2025, with total investments from State Grid and Southern Power Grid expected to exceed 800 billion yuan [2]. - The ongoing development of flexible direct current transmission technology is anticipated to enhance the company's growth prospects in the direct current transmission system business [1]. Profitability and Valuation - The report projects the company's net profit attributable to shareholders for 2025 to be 1.418 billion yuan, with earnings per share (EPS) expected to be 1.39 yuan. The price-to-earnings (P/E) ratio is projected to be 17 times for 2025 [4][3]. - The company's gross margin is expected to improve gradually, reaching 22.3% in 2025, with a net profit margin of 7.6% [12].