PRCO(SZ:002225) Changjiang Securities·2025-08-24 11:15Investment Rating - The investment rating for the company is "Buy" and is maintained [5][9]. Core Views - The company reported its H1 2025 performance with revenue of 2.79 billion, a year-on-year increase of 3.6%, while net profit attributable to shareholders was 69 million, a year-on-year decrease of 48% [2][4]. - In Q2 2025, the company achieved revenue of 1.45 billion, a year-on-year increase of 3.9%, but net profit attributable to shareholders dropped by 79% to 14 million, primarily due to a credit impairment provision of 32.14 million [4][9]. - The domestic refractory materials market is under pressure, with national production down 3.69% year-on-year in H1 2025, and crude steel production also declining by 3% [9]. - The company signed a long-term agreement with Greenmeadow to supply approximately 500,000 tons of active magnesium oxide from 2025 to 2028, which is expected to secure a stable profit base for the next three years [9]. - The company is expanding its active magnesium oxide business, with potential orders and a focus on markets in Indonesia and Africa, while also increasing capacity in the U.S. and Serbia [9]. Financial Summary - For 2025, the company expects revenues of 2.7 billion and 5.5 billion for 2026, corresponding to PE ratios of 32 and 15 times, respectively [9]. - The company's total revenue for 2024 is projected at 5.192 billion, with a gross profit of 986 million, resulting in a gross margin of 19% [15]. - The net profit for 2024 is estimated at 129 million, with an EPS of 0.14 [15].