Hexing(SH:603556) Western Securities·2025-09-10 05:10Investment Rating - The report assigns a "Buy" rating to the company, which has been adjusted to "Accumulate" from a previous "Buy" rating [4]. Core Views - The company has won a bid for a framework project worth 214 million yuan, which is expected to accelerate the growth of its domestic electric meter business [2]. - In the first half of 2025, the company reported revenue of 1.924 billion yuan, a year-on-year decrease of 14.7%, and a net profit attributable to shareholders of 396 million yuan, down 25.7% year-on-year. However, the second quarter showed a significant recovery compared to the first quarter [2]. - The decline in performance is attributed to delays in domestic project execution and fluctuations in demand in certain overseas markets, alongside increased investments in R&D and sales, leading to higher expenses [2]. - The company is seeing growth in new business areas, with a notable expansion in its overseas smart water business, which has signed contracts exceeding 100 million yuan in the first half of 2025 [2]. - The overseas distribution network has shifted from trade procurement to selling proprietary core products, achieving significant contracts in Asia, Africa, and Latin America [3]. Financial Summary - The company is expected to achieve net profits of 1.019 billion yuan, 1.273 billion yuan, and 1.536 billion yuan for the years 2025, 2026, and 2027, respectively, with growth rates of 1.6%, 25.0%, and 20.6% [3]. - Revenue projections for the years 2025 to 2027 are 5.197 billion yuan, 6.266 billion yuan, and 7.519 billion yuan, reflecting growth rates of 10.2%, 20.6%, and 20.0% [3]. - The earnings per share (EPS) are forecasted to be 2.09 yuan, 2.62 yuan, and 3.16 yuan for the years 2025, 2026, and 2027, respectively [3].