GONGNIU(SH:603195) HTSC·2025-08-29 04:52Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of RMB 59.00 [7][8]. Core Views - The company experienced a revenue decline of 2.60% year-on-year in H1 2025, with a total revenue of RMB 81.68 billion and a net profit of RMB 20.60 billion, down 8.00% year-on-year. The second quarter saw a revenue of RMB 42.46 billion, reflecting a year-on-year decline of 7.37% but a quarter-on-quarter increase of 8.24% [1][2]. - The traditional business is facing growth challenges due to the bottoming out of new home sales, while the company is actively cultivating new energy business and exploring incremental business opportunities [1][2]. - The company’s gross margin for H1 2025 was 42.33%, a decrease of 0.61 percentage points year-on-year, primarily due to fluctuations in raw material prices and changes in product mix [3]. - The company is focusing on high-end branding and exploring international markets, with overseas revenue reaching RMB 1.4 billion in the first half of the year [4]. Summary by Sections Revenue and Profitability - In H1 2025, the company's revenue from electrical connection business was RMB 36.62 billion, down 5.37% year-on-year, while the smart electrical lighting business generated RMB 40.94 billion, down 2.78% year-on-year. The new energy business, however, saw a revenue increase of 33.52% year-on-year, reaching RMB 3.86 billion [2]. - The company’s net profit margin for H1 2025 was 25.22%, a decrease of 1.48 percentage points year-on-year [3]. Investment Forecast and Valuation - The report adjusts the company's net profit forecasts for 2025-2027 downwards by 5.43%, 8.78%, and 11.90% respectively, projecting net profits of RMB 42.71 billion, RMB 44.04 billion, and RMB 47.15 billion for those years. The corresponding EPS is expected to be RMB 2.36, RMB 2.43, and RMB 2.61 [5]. - The company is assigned a target price of RMB 59.00 based on a 25x PE ratio for 2025, indicating a clear long-term growth path despite short-term performance pressures [5].