Changjiang Securities·2026-03-15 12:37Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Insights - The company is firmly advancing its "Connection + Computing Power" transformation strategy in 2025, with the computing power business (government and enterprise services) experiencing rapid growth, doubling its revenue year-on-year. However, the connection business is under pressure due to industry cycles, leading to short-term fluctuations in gross margin and a phase of adjustment in profitability. Strong R&D investment is expected to gradually restore profitability as self-developed chips and full-stack intelligent computing capabilities continue to strengthen and apply [2][12] Summary by Relevant Sections Revenue and Profitability - In 2025, the company achieved total revenue of 133.9 billion yuan, a year-on-year increase of 10.4%. The net profit attributable to shareholders was 5.6 billion yuan, down 33.3% year-on-year, while the net profit excluding non-recurring items was 3.4 billion yuan, down 45.5% year-on-year. In Q4 alone, the company reported revenue of 33.4 billion yuan, a quarter-on-quarter increase of 15.2%, with a net profit of 300 million yuan, up 11.9% quarter-on-quarter [6][12] Business Segmentation - The company's revenue from different business segments in 2025 was as follows: operator networks 62.9 billion yuan (down 10.6% year-on-year), government and enterprise services 37.2 billion yuan (up 100.5% year-on-year), and consumer business 33.8 billion yuan (up 4.4% year-on-year). The operator network business was primarily affected by the decline in domestic operators' 5G investment, while the government and enterprise services capitalized on opportunities in intelligent computing, leading to significant growth [12][12] Gross Margin and Cost Management - The overall gross margin for the company in 2025 was 30.3%, down 7.7 percentage points year-on-year, mainly due to the rapid growth of lower-margin government and enterprise services. The gross margins for operator networks, government and enterprise services, and consumer business were 48.1%, 11.0%, and 18.3%, respectively. Effective cost management was evident, with R&D, sales, and management expense ratios decreasing to 17.0%, 6.9%, and 3.2%, respectively [12][12] R&D Investment and Future Outlook - The company maintained a high level of R&D investment, totaling 24.5 billion yuan, accounting for approximately 18.3% of revenue. This investment focused on high-potential and strategic projects, enhancing capabilities in both network and computing power sectors. The company expects to see a gradual recovery in profitability as it continues to strengthen its full-stack intelligent computing capabilities [12][12] Profit Forecast - The company forecasts net profits attributable to shareholders for 2026, 2027, and 2028 to be 7.4 billion yuan, 8.5 billion yuan, and 9.5 billion yuan, respectively, with corresponding year-on-year growth rates of 31.8%, 14.5%, and 12.0%. The projected price-to-earnings ratios for these years are 24x, 21x, and 19x, respectively [12][12]