ORIENTAL YUHONG(SZ:002271) Guotou Securities·2025-10-28 11:30Investment Rating - The report maintains an investment rating of "Buy-A" for the company [4][9]. Core Views - The company has experienced a decline in revenue due to downward demand and intense market price competition, with a year-on-year revenue decrease of 5.06% in the first three quarters of 2025. However, Q3 showed a positive revenue growth of 8.51% compared to the same quarter last year, attributed to a low base effect from the previous year [2][4]. - The company's net profit attributable to shareholders decreased by 36.61% year-on-year in the first three quarters, with a narrowing decline in Q3 to 26.58%. This decline is primarily due to a decrease in gross margin and an increase in impairment losses [2][4]. - The company has effectively controlled its expense ratio, resulting in a significant improvement in operating cash flow, which increased by 184.56% year-on-year to 416 million yuan [3][4]. Summary by Sections Revenue Performance - In the first three quarters of 2025, the company achieved revenue of 20.601 billion yuan, with quarterly revenues showing a trend of -16.71% in Q1, -5.64% in Q2, and +8.51% in Q3 [2][4]. - The gross margin for the period was 25.19%, a decrease of 3.94 percentage points year-on-year, mainly due to intense market competition [3]. Profitability - The net profit attributable to shareholders for the first three quarters was 810 million yuan, with a quarterly decline of -44.68% in Q1, -37.52% in Q2, and -26.58% in Q3, indicating a narrowing decline trend [2][4]. - The company reported a net profit margin of 3.82%, down 1.99 percentage points year-on-year [3]. Cash Flow and Expenses - The operating cash flow for the period was a net inflow of 416 million yuan, significantly improved due to enhanced collection efforts and reduced cash payments for goods and services [3]. - The company maintained a total expense ratio of 16.61%, down 1.95 percentage points year-on-year, with reductions in sales, management, financial, and R&D expense ratios [3]. Future Outlook - The company is expected to see revenue growth in the coming years, with projected revenues of 25.436 billion yuan, 26.554 billion yuan, and 27.833 billion yuan for 2025, 2026, and 2027, respectively [4]. - The net profit is forecasted to rebound significantly in 2025, reaching 1.227 billion yuan, with substantial growth rates in subsequent years [4].