WST(SH:688122) HTSC·2025-10-30 08:58Investment Rating - The report maintains a "Buy" rating for the company with a target price of 99.18 RMB [6][5]. Core Views - The company reported Q3 revenue of 1.266 billion RMB, a year-over-year increase of 4.23%, but a quarter-over-quarter decrease of 23.22%. The net profit attributable to the parent company was 104 million RMB, down 59.44% year-over-year and 72.48% quarter-over-quarter. For the first three quarters of 2025, the company achieved a revenue of 3.989 billion RMB, up 23.30% year-over-year, and a net profit of 650 million RMB, up 7.62% year-over-year [1][2]. - The decline in Q3 net profit is attributed to a decrease in government subsidies, increased asset impairment provisions, and higher R&D expenditures [2]. - The company is optimistic about long-term growth driven by its three major segments: high-end titanium alloys, superconductors, and high-temperature alloys [1]. Summary by Sections Financial Performance - In Q3 2025, the company’s revenue was 1.266 billion RMB, with a year-over-year growth of 4.23% and a quarter-over-quarter decline of 23.22%. The net profit attributable to the parent company was 104 million RMB, reflecting a significant year-over-year decrease of 59.44% and a quarter-over-quarter decrease of 72.48% [1][2]. - For the first three quarters of 2025, the company reported a total revenue of 3.989 billion RMB, which is a 23.30% increase year-over-year, and a net profit of 650 million RMB, up 7.62% year-over-year [1]. R&D and Investments - The company is investing in R&D, with Q3 2025 R&D expenses reaching 113 million RMB, a year-over-year increase of 113.92%. This increase is part of the company's strategy to advance its R&D projects [2]. - The company announced a joint investment to establish Hefei Juneng, contributing 161.5 million RMB, which will enhance the development of high-performance superconducting materials for fusion engineering [3]. Market Position and Outlook - The company has a strong order backlog for superconducting products, benefiting from the acceleration of global nuclear fusion commercialization. As the sole domestic supplier of low-temperature superconducting wire for the ITER project, the company is well-positioned to capitalize on this trend [4]. - The company’s inventory as of Q3 2025 was 4.311 billion RMB, an increase of 11.68% from the beginning of the year, indicating strong demand for its products [4]. Profit Forecast and Valuation - The report maintains profit forecasts for the company, projecting net profits of 983 million RMB, 1.128 billion RMB, and 1.323 billion RMB for 2025, 2026, and 2027, respectively. The estimated EPS for these years is 1.51 RMB, 1.74 RMB, and 2.04 RMB [5][9]. - The company is assigned a PE ratio of 57 times for 2026, reflecting its unique market position and growth potential [5].