Sunrise(SZ:300360) HTSC·2025-08-28 05:21Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of RMB 18.15 [6][5]. Core Views - The company reported a revenue of RMB 884 million for H1 2025, a year-on-year decrease of 12.88%, while the net profit attributable to shareholders was RMB 344 million, an increase of 1.00% year-on-year. The decline in revenue is attributed to the impact of delivery schedules [1][2]. - The domestic smart meter market is currently experiencing a peak replacement cycle, with new standards expected to stabilize bidding volumes and potentially increase prices. The company is well-positioned to benefit from this trend [3][4]. - The company is actively expanding its overseas business, particularly in Europe, Africa, and Southeast Asia, which is expected to drive revenue growth. Additionally, the development of demand-side energy IoT business is anticipated to contribute to profit increments [4][5]. Summary by Sections Financial Performance - In Q2 2025, the company achieved revenue of RMB 451 million, a year-on-year decrease of 17.57%, while the net profit attributable to shareholders was RMB 170 million, down 25.93% year-on-year. The overall expense ratio decreased to 5.78% [2][5]. - The gross margin for H1 2025 was 43.08%, a decrease of 4.66 percentage points year-on-year, primarily due to price reductions in the domestic meter market [2]. Market Outlook - The report highlights that the new standards for smart meters are expected to lead to stable volumes and price increases, with larger companies likely to gain higher market shares during the initial phase of implementation [3][4]. - The demand for smart meters and related measurement and monitoring devices is projected to grow significantly due to the increasing reliance on flexible resource development [3]. Profit Forecast and Valuation - The company’s net profit forecasts for 2025-2027 have been adjusted downwards by approximately 9.59%, 9.53%, and 8.27% respectively, with expected net profits of RMB 718 million, RMB 813 million, and RMB 907 million [5][9]. - The report assigns a PE ratio of 13 times for 2025, reflecting the company's higher elasticity in overseas markets [5][9].