HQTI(SH:688281) HTSC·2025-10-29 04:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 84.15 [6][10]. Core Insights - The company reported Q3 revenue of RMB 285 million, a year-over-year increase of 12.85% and a quarter-over-quarter increase of 3.68%. The net profit attributable to the parent company was RMB 97.36 million, up 3.73% year-over-year and up 17.32% quarter-over-quarter [6][7]. - For the first three quarters of 2025, the company achieved revenue of RMB 801 million, a year-over-year increase of 8.63%, but the net profit attributable to the parent company decreased by 21.48% year-over-year [6][7]. - The decline in profit is attributed to the increased revenue share from research and development products, which has not yet realized scale benefits, impacting the gross margin [6][9]. - The company is positioned as a leader in military stealth materials, with strong ongoing demand and potential for future growth as subsidiaries ramp up production [6][9]. Financial Performance and Forecast - Revenue projections for the company are as follows: RMB 1,139 million in 2024 (+24.17%), RMB 1,198 million in 2025 (+5.15%), RMB 1,534 million in 2026 (+28.02%), and RMB 1,890 million in 2027 (+23.27%) [5][10]. - Net profit attributable to the parent company is forecasted to be RMB 413.92 million in 2024 (+23.56%), RMB 402.90 million in 2025 (-2.66%), RMB 509.32 million in 2026 (+26.41%), and RMB 626.33 million in 2027 (+22.97%) [5][10]. - The company’s EPS is projected to be RMB 1.52 in 2024, RMB 1.48 in 2025, RMB 1.87 in 2026, and RMB 2.30 in 2027 [5][10]. Business Development - The company’s subsidiaries have shown strong growth, with Huayin Hangfa achieving revenue of RMB 103 million in the first three quarters of 2025, a year-over-year increase of 142.95% [8]. - Huayin Guangsheng reported revenue of RMB 9.85 million, up 184.92% year-over-year, with total orders expected to reach RMB 65-80 million for the year [8]. - The company has signed contracts worth RMB 402 million for special functional materials, indicating robust demand and a strong order backlog [9]. Research and Development - The company has significantly increased its R&D investment, totaling RMB 105 million in the first three quarters of 2025, a year-over-year increase of 81.39% [9]. - Ongoing R&D efforts focus on special functional materials, aerospace components, acoustic metamaterials, and ceramic matrix composites, which are expected to strengthen the company's technological barriers [9].