DMEGC(SZ:002056) Zhongyuan Securities·2025-08-26 11:23Investment Rating - The report assigns an "Increase" investment rating to the company, indicating a potential relative increase of 5% to 15% compared to the CSI 300 index over the next six months [29]. Core Views - The company has demonstrated a solid recovery in performance during the first half of 2025, with significant improvements in profitability. The revenue reached 11.936 billion yuan, a year-on-year increase of 24.75%, while net profit attributable to shareholders was 1.020 billion yuan, up 58.94% year-on-year [6][9]. - The company's growth is driven by its strong positions in the photovoltaic, magnetic materials, and lithium battery sectors, with notable increases in product shipments and revenue across these segments [9][12]. - The company is well-positioned to benefit from industry trends, including the differentiation strategy in the photovoltaic sector and the expansion into emerging markets for magnetic materials [10][12]. Summary by Sections Financial Performance - For the first half of 2025, the company achieved a net cash flow from operating activities of 1.701 billion yuan, a year-on-year increase of 26.46%. Basic earnings per share were 0.64 yuan, and a cash dividend of 3.80 yuan per 10 shares was declared [6][9]. - The company’s gross margin improved across its business segments, with the photovoltaic segment achieving a gross margin of 16.70%, an increase of 5.29 percentage points year-on-year [9][12]. Business Segments - Photovoltaic Segment: The company shipped 13.4 GW of photovoltaic modules, a year-on-year increase of 65.43%, with revenue from this segment reaching 8.054 billion yuan, up 36.58% year-on-year [9][12]. - Magnetic Materials Segment: The company shipped 107,300 tons of magnetic materials, a decrease of 8.05% year-on-year, but revenue increased to 1.939 billion yuan, a growth of 4.51% year-on-year, with a gross margin of 27.71% [9][12]. - Lithium Battery Segment: The company shipped over 300 million lithium batteries, generating revenue of 1.286 billion yuan, a year-on-year increase of 4.04%, with a gross margin of 12.90% [9][12]. Future Outlook - The company is expected to maintain strong growth, with projected net profits of 1.986 billion yuan, 2.290 billion yuan, and 2.531 billion yuan for 2025, 2026, and 2027, respectively [12]. The corresponding fully diluted EPS is expected to be 1.22 yuan, 1.41 yuan, and 1.56 yuan [12]. - The company’s valuation appears attractive, with a price-to-earnings ratio of 15.29 for 2025, indicating a low valuation level compared to its growth prospects [12].