ZHENHUA(SZ:000733) Orient Securities·2025-10-28 07:10Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 67.55 CNY based on a 35x PE ratio for 2025 [3][5]. Core Insights - The company reported a revenue of 39.26 billion CNY for the first three quarters of 2025, reflecting a year-on-year increase of 4.98%, while the net profit attributable to the parent company was 6.23 billion CNY, down 3.31% [2]. - In Q3 alone, the company achieved a revenue of 15.16 billion CNY, marking a 15.78% increase, and a net profit of 3.11 billion CNY, which is up 38.68% compared to the previous quarter [2]. - The defense market has shown signs of recovery since Q1 2025, with a notable improvement in demand for military electronics, leading to a significant increase in new orders [10]. - The company's gross margin and net margin improved in Q3, reaching 47.26% and 20.52% respectively, indicating a recovery in profitability [10]. - The company's contract liabilities doubled compared to the beginning of the year, and inventory levels have been increasing, suggesting a positive outlook for future performance [10]. Financial Summary - The company’s projected earnings per share (EPS) for 2025, 2026, and 2027 are 1.93 CNY, 2.82 CNY, and 3.37 CNY respectively [3]. - The revenue forecast for 2025 is 66 billion CNY, with a projected growth rate of 26.5% [4]. - The company’s net profit is expected to reach 1.072 billion CNY in 2025, with a growth rate of 10.4% [4]. - The gross margin is projected to be 46.9% in 2025, with a gradual recovery expected in subsequent years [4].