TORCH ELECTRON(SH:603678) Tianfeng Securities·2025-08-28 06:35Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative return of over 20% within the next six months [5]. Core Views - The company has experienced significant revenue growth, with total operating income reaching 1.772 billion yuan in H1 2025, a year-on-year increase of 24.2%. The net profit attributable to shareholders was 261 million yuan, up 59.04% year-on-year [1]. - The recovery of the self-produced components business, which generated 692 million yuan in revenue, reflects a year-on-year growth of 27.62%. This growth is attributed to the release of delayed orders and the initiation of new equipment under the "14th Five-Year Plan" [2]. - The new materials segment has shown remarkable growth, with revenue increasing by 101.88% to 133 million yuan. The company is positioned to benefit from the increasing demand for ceramic materials in next-generation aerospace equipment [3]. Summary by Sections Revenue and Profitability - In H1 2025, the company achieved total operating revenue of 1.772 billion yuan, a 24.2% increase year-on-year. The net profit attributable to shareholders was 261 million yuan, reflecting a 59.04% increase year-on-year. The second quarter saw revenue of 1.010 billion yuan, up 30.29% year-on-year and 32.52% quarter-on-quarter [1]. Cost Management - The company reported a total expense ratio of 16.14% in the first half of 2025, a decrease of 2.85 percentage points year-on-year. The individual expense ratios for sales, management, R&D, and financial costs were 4.27%, 8.52%, 2.83%, and 0.52%, respectively, all showing a decline compared to the previous year [1]. Business Segments - The self-produced components business generated 692 million yuan in revenue, marking a 27.62% year-on-year increase. The recovery in orders is expected to drive performance, supported by the military's informationization process and new product developments [2]. - The new materials segment achieved revenue of 133 million yuan, a 101.88% increase year-on-year. The company is well-positioned to benefit from the strategic significance of ceramic materials in new-generation equipment [3]. Financial Forecast - The company is projected to achieve net profits of 502 million yuan, 722 million yuan, and 905 million yuan for the years 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 37.92, 26.36, and 21.04 [3][4].