PONY(SZ:300887) Changjiang Securities·2025-10-28 04:43Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Views - The company reported a revenue of 932 million yuan for the first three quarters, a year-on-year decline of 17.0%, with a net profit attributable to the parent company of -199 million yuan. In Q3 2025, revenue was 368 million yuan, down 7.0% year-on-year, but the net profit showed a significant reduction in losses [2][6]. - Looking ahead to Q4 2025 and 2026, the company is expected to see continued profit improvement due to reduced bad debt impairment pressure and a recovery in demand from the biopharmaceutical, military, and new energy vehicle sectors [2]. Summary by Sections Revenue Performance - In Q3 2025, the revenue decline narrowed significantly compared to earlier quarters, with a drop of 7.0% compared to Q1's -24.7% and Q2's -20.5%. The company faced revenue pressure due to industry-specific events affecting military and biopharmaceutical testing, as well as adjustments in customer structure leading to a decline in government orders [14]. - For H1 2025, revenue by business segment showed a decline in life sciences and environmental protection by 27.05%, while automotive and other consumer goods fell by 17.85%. However, safety assurance revenue increased by 10.02% [14]. Profitability Analysis - The net profit for 2024 and H1 2025 was significantly negative, but Q3 2025 showed a notable reduction in losses. The losses were attributed to rigid costs during customer structure adjustments, increased competition in the biopharmaceutical sector, and initial high investments in newly expanded special equipment testing [14]. - The company expects to turn profitable as revenue recovers and the risks associated with asset and credit impairments decrease [14]. Cash Flow and Financial Projections - Despite significant net losses in 2024, the operating cash flow was positive at 36 million yuan. For Q1-Q3 2025, the cash flow improved to -27 million yuan, a notable improvement from -116 million yuan in the previous year [14]. - Revenue projections for 2025-2027 are 1.365 billion yuan, 1.586 billion yuan, and 1.819 billion yuan, with expected year-on-year growth rates of -11.4%, 16.1%, and 14.7% respectively. The net profit is projected to gradually recover, reaching 145 million yuan by 2027 [19].