Investment Rating - The report maintains a "Recommended" rating for Tongling Co., Ltd. [3] Core Views - The profitability of the junction box segment has significantly declined, while automotive components have become the second main business for the company [1][2] - The company achieved a revenue of 1.587 billion in 2024, a year-on-year increase of 3.04%, but the net profit attributable to shareholders dropped by 56.73% to 71.395 million [1] - The average selling price of photovoltaic junction boxes decreased by 18.0% from 15.54 yuan per unit in 2023 to 12.74 yuan in 2024, impacting profitability [1] - The automotive parts business generated 300 million in revenue in 2024, accounting for 18.9% of total revenue, with a net profit contribution of 24.386 million [2] Financial Performance Summary - In Q1 2025, the company reported a revenue of 419 million, a 2.65% increase year-on-year, but the net profit fell by 41.64% to 20.880 million [1] - The gross margin for the junction box segment dropped from 22.90% in 2023 to 15.43% in 2024 [1] - The company expects net profits for 2025, 2026, and 2027 to be 109 million, 164 million, and 208 million respectively, with corresponding EPS of 0.91, 1.36, and 1.73 [3][4] Market Position and Outlook - The market share of the company decreased from 11.7% in 2023 to 9.4% in 2024, primarily due to delays in overseas capacity expansion [2] - The company anticipates a recovery in profitability for the junction box segment in 2025 as the photovoltaic industry prices stabilize [2] - The automotive parts project has a gross margin of 27.52%, which helps alleviate the pressure from the company's single product structure [2]