Xianhe(SH:603733) SINOLINK SECURITIES·2025-10-31 02:40Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% in the next 6-12 months [6][15]. Core Insights - The company reported a revenue increase of 24.8% for the first three quarters of 2025, with a revenue of 906 million yuan, while net profit decreased by 4.8% to 78 million yuan [2]. - The company is experiencing steady revenue growth due to new production capacities and expansion into overseas markets, with significant contributions expected from new projects in Guangxi and Hubei [3]. - The gross margin improved in Q3 2025, reaching 14.6%, while the net margin was 9.9%, indicating a recovery from previous declines [4]. - The company is focusing on high-margin products in overseas markets, which is expected to contribute significantly to performance improvements [5]. Summary by Sections Performance Review - For Q3 2025, the company achieved a revenue of 307 million yuan, with a net profit of 30 million yuan, reflecting a year-on-year increase of 15.5% and 13.9% respectively [2]. Operational Analysis - The company is successfully ramping up production in new facilities and expanding its customer base internationally, which is expected to enhance revenue stability [3]. - The reliance of downstream customers on the company's supply chain has increased, allowing the company to maintain pricing despite soft demand [3]. Financial Metrics - The gross margin for the first three quarters of 2025 was 14.0%, down 2.5 percentage points year-on-year, but improved to 14.6% in Q3 2025 [4]. - Financial expenses increased due to higher interest costs from long-term borrowings, with the financial expense ratio rising to 3.1% [4]. Earnings Forecast - Projected revenues for 2025-2027 are 12.914 billion yuan, 15.257 billion yuan, and 17.736 billion yuan, representing growth rates of 25.70%, 18.14%, and 16.25% respectively [6]. - Expected net profits for the same period are 1.028 billion yuan, 1.271 billion yuan, and 1.517 billion yuan, with growth rates of 2.37%, 23.70%, and 19.35% respectively [6].