ZONGSHEN POWER(SZ:001696) Guoxin Securities·2025-11-17 03:19Investment Rating - The investment rating for the company is "Outperform the Market" [5][3]. Core Insights - The company has shown significant growth, with a net profit of 252 million yuan in Q3 2025, representing a year-on-year increase of 131%. For the first three quarters of 2025, revenue reached 9.639 billion yuan, up 30.17% year-on-year, and net profit was 758 million yuan, up 93.70% year-on-year [1][8]. - The company is actively expanding into the low-altitude economy, focusing on traditional sectors like general machinery and motorcycle engines while also investing in emerging fields such as aviation power, new energy, and high-end components [2][59]. - The company has a robust order book and continues to see growth in its core businesses, which supports the maintained profit forecasts for 2025-2027 [3][59]. Financial Performance - In Q3 2025, the company achieved a revenue of 2.946 billion yuan, a year-on-year increase of 13.68%, while the net profit for the same period was 252 million yuan, reflecting a year-on-year growth of 130.65% [1][8]. - The gross margin for Q3 2025 was 15.1%, up 0.3 percentage points year-on-year, and the net margin was 9.1%, up 4.4 percentage points year-on-year [13][1]. - The company’s operating income projections for 2025-2027 are 13.411 billion yuan, 16.127 billion yuan, and 18.727 billion yuan, respectively, with net profits expected to be 1.007 billion yuan, 1.187 billion yuan, and 1.369 billion yuan [4][59]. Business Segments - The company is a leading player in the domestic small and medium-sized power machinery sector, focusing on general machinery and motorcycle engines, while also developing its aviation power and new energy segments [25][2]. - The aviation power segment has developed a product line centered on small and medium-sized aviation piston engines, with over 20 derivative products launched, targeting the drone and light aircraft markets [2][39]. - The new energy business is structured around electric drive systems, energy storage solutions, and hydrogen energy, aiming to create a balanced growth model between traditional and innovative sectors [45][51]. Market Position - The company maintains a strong market position in traditional sectors while actively pursuing growth in emerging fields, which is expected to provide new revenue streams and enhance overall market competitiveness [59][26]. - The company’s strategic focus on low-altitude economy opportunities is anticipated to yield significant business growth, particularly in the aviation engine sector [40][59].