Yunlu Materials(SH:688190) Tianfeng Securities·2025-11-04 08:16Investment Rating - The investment rating for the company is "Buy" with a target price reflecting a potential return of over 20% within six months [6][18]. Core Views - The company has shown a revenue growth of 5.03% year-on-year for the first three quarters of 2025, achieving a total revenue of 1.458 billion yuan. However, the net profit decreased by 4.96% year-on-year to 250 million yuan [1][2]. - The company is experiencing increased competition in the market, which has impacted profit margins despite revenue growth. The gross margin for Q3 2025 was reported at 26.84%, down from previous periods [2][3]. - The non-crystalline motor segment is expected to drive future growth, with significant energy savings compared to traditional silicon steel transformers. The company has established a strong international presence, exporting to over 30 countries [3][4]. Summary by Sections Financial Performance - For Q3 2025, the company reported a revenue of 472 million yuan, a decrease of 1.2% year-on-year and a 16.4% decline quarter-on-quarter. The net profit for the same period was 80 million yuan, down 16.2% year-on-year [1][2]. - The gross margin for Q3 2025 was 26.84%, reflecting a decline due to increased competition, while the net profit margin stood at 17.01% [2][3]. Growth Potential - The non-crystalline segment is projected to have a broad replacement market, with the company becoming the largest supplier of non-crystalline alloy strips globally, with an annual design capacity of 105,000 tons [3][4]. - The company is also expanding its production capacity in the nano-crystalline and magnetic powder segments, targeting new applications in the home appliance and new energy vehicle markets [3][4]. Earnings Forecast - The forecast for net profit for the years 2025 to 2027 is 364 million yuan, 399 million yuan, and 435 million yuan respectively, with corresponding price-to-earnings ratios of 34, 31, and 29 times [4][5].