First Shanghai Securities·2025-11-03 11:33Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 55.0, indicating a potential upside of 39% from the current price of HKD 39.62 [4][6]. Core Insights - The company reported a steady performance in the first three quarters of 2025, with revenue of RMB 18.83 billion, a year-on-year increase of 14.9%, and a net profit of RMB 2.72 billion, up 10.9% year-on-year. The adjusted net profit grew by 30.9% year-on-year to RMB 2.61 billion [2][3]. - The rail transit business showed stable growth, with maintenance services accounting for approximately 22% of rail transit revenue, reflecting a significant increase compared to the previous year. The company is expected to benefit from the growing demand for maintenance services in national rail and urban rail systems [3]. - The semiconductor factory reached full production capacity, generating significant revenue growth. The new energy generation division has started to operate independently and has achieved slight profitability, with plans for further business expansion in solar and energy storage sectors [3]. Financial Projections - The company is projected to achieve revenues of RMB 27.83 billion, RMB 30.92 billion, and RMB 34.63 billion for the years 2025, 2026, and 2027, respectively, with growth rates of 11.7%, 11.1%, and 12.0% [4][7]. - Net profits are expected to be RMB 4.10 billion, RMB 4.58 billion, and RMB 5.06 billion for the same years, with growth rates of 10.7%, 11.8%, and 10.4% [4][7]. - The report estimates a price-to-earnings (PE) ratio of 15 times for 2026, supporting the target price of HKD 55.0 [4].