PRCO(SZ:002225) Changjiang Securities·2025-11-16 23:30Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company reported a revenue of 4.176 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 4.34%. However, the net profit attributable to shareholders was 94.8659 million yuan, a decrease of 22.81% year-on-year. The net profit after deducting non-recurring gains and losses was 73.5099 million yuan, down 4.63% year-on-year. In Q3 2025, the company achieved a quarterly revenue of 1.38 billion yuan, up 5.9% year-on-year, and a net profit of 26 million yuan, a significant increase of 353% year-on-year [2][4]. Summary by Sections Company Overview - The company is a leader in the refractory materials industry in China and is actively expanding overseas, with plans to establish factories in the United States and Serbia. This expansion is expected to enhance growth due to better competitive conditions and profitability in overseas markets compared to domestic ones [5]. Product Development - The company is focusing on the active magnesium oxide product line, leveraging high-quality magnesium ore from Tibet. This product is applicable in nickel and cobalt deposition, which is anticipated to create new growth opportunities. A recent agreement with GEM Co., Ltd. includes a commitment to purchase approximately 500,000 tons of active magnesium oxide from the company between 2025 and 2028 [5][11]. Financial Performance - In Q3 2025, the company reported a gross margin of 18.35%, a slight year-on-year increase, attributed to ongoing product structure optimization. The company also recognized a credit impairment loss of 10.26 million yuan during this quarter [6]. Future Outlook - The company expects significant growth in revenue from active magnesium oxide, with projected earnings of 190 million yuan and 490 million yuan for 2025 and 2026, respectively. The corresponding price-to-earnings ratios are estimated to be 39 and 15 times [11].