GHSI(SZ:000576) Soochow Securities·2025-08-25 05:47Investment Rating - The report gives a "Buy" rating for the company, Ganhua Science and Technology [1]. Core Views - The company is expected to benefit from the rapid increase in ammunition production and continuous technological innovation, leading to significant growth in revenue and net profit in the coming years [1][61]. - The company has transformed from a traditional sugar industry to a high-tech military industry, successfully acquiring key assets in the ammunition sector [1][12]. - The global ammunition production cycle is anticipated to grow, with substantial orders being placed domestically and internationally, positioning the company to capitalize on this trend [1][55]. Summary by Sections 1. Core Business and Transformation - Ganhua Science and Technology has shifted its focus to military applications, providing specialized power supplies and high-performance alloy materials for military use [11][16]. - The company has undergone significant transformation since 2018, acquiring several military-related companies to enhance its technological capabilities and market position [12][21]. - The acquisition of Xian Ganxin Technology Co., Ltd. allows the company to enter the optical navigation system market, further diversifying its product offerings [34][51]. 2. Market Demand and Growth Potential - The demand for military equipment and ammunition is expected to rise significantly due to geopolitical tensions and modernization efforts, creating a favorable environment for the company [40][50]. - The company is well-positioned in the ammunition supply chain, covering critical components such as power supplies and optical systems, which are essential for modern military applications [57][58]. - The report forecasts robust revenue growth for the company, with expected net profits of 1.1 billion, 1.6 billion, and 2.3 billion yuan for 2025, 2026, and 2027 respectively [1][61]. 3. Financial Performance and Projections - The company reported a revenue of 396.29 million yuan in 2024, a year-on-year increase of 22.58%, and a net profit of 20.51 million yuan, marking a significant turnaround from previous losses [1][25]. - The projected earnings per share (EPS) for 2025 is expected to be 0.24 yuan, with a price-to-earnings (P/E) ratio of 46.35 [1][61]. - The company’s strategic focus on R&D has led to a significant increase in its research investment, which is expected to enhance its competitive edge in the military sector [27][40].