ZTT(SH:600522) Changjiang Securities·2025-09-02 09:45Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Views - The company reported a significant increase in revenue and performance in Q2 2025, with a robust growth in the energy network business and stable performance in the communication sector. The company is actively expanding into liquid cooling, high-speed optical modules, and hollow-core optical fibers [2][6]. - The gross margin has improved quarter-on-quarter, reflecting effective cost control measures. The company has a healthy backlog of orders and continues to make progress in both domestic and international projects [2][6]. - The company is leveraging opportunities in AI and data center products, while also continuing its share repurchase program [2][6]. Summary by Sections Revenue and Performance - In H1 2025, the company achieved a revenue of 23.6 billion yuan, a year-on-year increase of 10.2%. The net profit attributable to shareholders was 1.57 billion yuan, up 7.4% year-on-year. In Q2 2025, revenue reached 13.84 billion yuan, a year-on-year increase of 5.1% and a quarter-on-quarter increase of 41.9% [6][9]. Business Segments - The energy network business showed steady growth, with the marine segment achieving a revenue of 2.896 billion yuan, a significant year-on-year increase of 37.19%. The grid business generated 9.975 billion yuan, up 11.97% year-on-year, driven by demand for ultra-high voltage and smart distribution networks. The communication business remained stable, supported by demand for specialty optical fibers and optoelectronic composite products [2][6]. Profitability and Cost Control - The overall gross margin for Q2 2025 was approximately 15.4%, with a year-on-year decrease of 0.4 percentage points but an increase of 0.8 percentage points quarter-on-quarter. The company demonstrated effective cost control, with sales, management, R&D, and financial expense ratios showing improvements [2][6]. Order Backlog and Project Development - As of July 31, 2025, the company had a substantial order backlog of approximately 30.6 billion yuan in the energy network sector, including 13.3 billion yuan in marine projects and 15.5 billion yuan in grid construction. The company achieved significant breakthroughs in the domestic ultra-high voltage submarine cable sector and successfully secured international projects in the Middle East, Vietnam, and Brazil [2][6]. Strategic Initiatives - The company is actively pursuing opportunities in AI and data center products, with advancements in liquid cooling, high-speed optical modules, and hollow-core optical fibers. The share repurchase program is ongoing, with 18.79 million shares repurchased, accounting for 0.55% of the total share capital, at a total cost of 252 million yuan [2][6]. Profit Forecast and Investment Recommendation - The company is expected to achieve net profits of 3.409 billion yuan, 3.871 billion yuan, and 4.326 billion yuan for 2025, 2026, and 2027, respectively, with corresponding year-on-year growth rates of 20%, 14%, and 12%. The price-to-earnings ratios are projected to be 16x, 14x, and 13x for the same years, respectively, leading to a strong recommendation to "Buy" [2][6].