Hexing(SH:603556) Shenwan Hongyuan Securities·2025-10-29 09:12Investment Rating - The investment rating for the company is "Outperform" [1] Core Insights - The company reported a revenue of 3.369 billion yuan for the first three quarters of 2025, a year-on-year decrease of 1.19%, and a net profit attributable to shareholders of 732 million yuan, down 7.48%. However, in Q3 2025, the company achieved a revenue of 1.445 billion yuan and a net profit of 336 million yuan, representing year-on-year increases of 25.12% and 30.21% respectively, indicating a recovery in performance driven by the growth in smart water meters, new energy, and distribution businesses [1][10] - The company has expanded its smart power distribution business both domestically and internationally, with significant developments in its new energy business. The South African smart ultrasonic water meter factory has commenced operations, marking a key step in localizing its smart water business in Africa. The company has also secured large-scale bids for its self-owned distribution network products in Asia, Africa, and Latin America, and has launched the "Orca" platform 10.0, enhancing its competitiveness in the smart grid sector [10] - The company has a strong commitment to shareholder returns, having distributed a total cash dividend of 338 million yuan for the 2024 annual profit distribution plan, continuing a nine-year streak of cash dividends since 2016, totaling approximately 2.306 billion yuan. Additionally, a share repurchase plan has been initiated, with a planned repurchase amount of 100 to 200 million yuan [10] - The company's earnings forecast for 2025-2027 is set at 870 million, 1.027 billion, and 1.243 billion yuan respectively, with the current stock price corresponding to a PE ratio of 18, 15, and 12 for 2025-2027. The company maintains a positive outlook on the synergy between its power distribution and new energy businesses, which is expected to enhance profitability in the medium to long term [10][11] Financial Data and Profit Forecast - Total revenue for 2025 is projected at 5.021 billion yuan, with a year-on-year growth rate of 6.4%. The net profit attributable to shareholders is expected to be 870 million yuan, reflecting a year-on-year decrease of 13.1%. The earnings per share are forecasted to be 1.79 yuan [3][11] - The gross profit margin is expected to stabilize at 43.9% from 2025 to 2027, while the return on equity (ROE) is projected to increase from 10.9% in 2025 to 12.1% in 2027 [3][11]