CCG(SH:605099) HTSC·2025-10-31 06:40Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 40.31 [1][4]. Core Insights - The company reported Q3 revenue of RMB 792 million, a year-on-year increase of 5.69% but a quarter-on-quarter decrease of 10.84%. The net profit attributable to the parent company was RMB 171 million, up 54.49% year-on-year but down 9.57% quarter-on-quarter, slightly exceeding previous expectations due to a continued decline in raw material costs and effective cost reduction measures [1]. - For the first three quarters of 2025, the company achieved a cumulative revenue of RMB 2.474 billion, a year-on-year increase of 9.52%, and a net profit of RMB 515 million, up 30.89% year-on-year [1]. - The gross margin for the first three quarters of 2025 was 34.04%, an increase of 3.88 percentage points year-on-year, with Q3 gross margin at 35.74%, reflecting improvements due to lower raw material prices and effective cost management [2]. - The company’s operating cash flow improved significantly, with a net cash flow from operating activities of RMB 542 million for the first three quarters, a year-on-year increase of 103.8%, attributed to enhanced receivables turnover and increased cash inflow from sales [3]. Summary by Sections Financial Performance - Q3 revenue was RMB 792 million, with a year-on-year growth of 5.69% and a quarter-on-quarter decline of 10.84% [1]. - The net profit for Q3 was RMB 171 million, representing a year-on-year increase of 54.49% [1]. - Cumulative revenue for the first three quarters of 2025 reached RMB 2.474 billion, up 9.52% year-on-year, with net profit at RMB 515 million, a 30.89% increase [1]. Cost Management and Margins - The gross margin for the first three quarters was 34.04%, up 3.88 percentage points year-on-year, with Q3 gross margin at 35.74% [2]. - The decline in raw material prices, particularly PVC resin, contributed to improved margins, with Q3 PVC resin prices down 15.3% year-on-year [2]. Cash Flow and Efficiency - The company achieved a net cash flow from operating activities of RMB 542 million for the first three quarters, a 103.8% increase year-on-year [3]. - The receivables turnover ratio improved, with cash received from sales significantly increasing [3]. Profit Forecast and Valuation - The net profit forecasts for 2025-2027 have been adjusted upwards by 3.74%, 8.16%, and 12.89% respectively, with projected net profits of RMB 659 million, RMB 811 million, and RMB 1.022 billion [4]. - The estimated EPS for 2025, 2026, and 2027 are RMB 1.64, RMB 2.02, and RMB 2.54 respectively [4].