Core Viewpoint - The sudden resignation of Wang Zhigen, chairman of Xinji Energy, raises concerns as he left just over a month before his term was set to end in July 2025, citing age as the reason for his departure [1][2]. Group 1: Leadership Changes - Wang Zhigen is the third chairman to resign in four years, following Chen Pei and Yang Boda, both of whom faced serious disciplinary investigations [3][5]. - Wang's resignation is notable as he was born in September 1966, making him under 59 years old, and his expected retirement age would not be until September 2026 [2][4]. Group 2: Financial Performance - In Q1 2025, Xinji Energy reported a revenue of 2.91 billion yuan, a year-on-year decrease of 4.85%, and a net profit of 532 million yuan, down 11.01% [7][8]. - The company’s inventory reached 500 million yuan by the end of Q1, reflecting a significant increase of 62.59% year-on-year, primarily due to rising coal stock [9]. Group 3: Market Context - Xinji Energy's performance is influenced by the coal market, with a reported decline in coal sales revenue of 0.85% in Q1 2025 [8]. - The company plans to reduce its coal production by approximately 2.91% in 2025, with an expected output of 18.5 million tons [7].

Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Views - The company is expected to experience a decline in revenue performance in 2024 due to fluctuations in defense demand and insufficient orders, with a projected revenue of 5.025 billion yuan, a year-on-year decrease of 19.08%. The net profit is expected to be 347 million yuan, down 53.75% year-on-year. However, the gross margin is stable and slightly increasing, while the net profit margin is expected to decline due to rising operating expenses [2][12]. - The significant increase in inventory is aimed at ensuring short-term delivery, while the establishment of production capacity solidifies long-term growth certainty [2][12]. Summary by Sections Financial Performance - In 2024, the company achieved total revenue of 5.025 billion yuan, a decrease of 19.08% year-on-year. The total profit was 408 million yuan, down 56.43% year-on-year, and the net profit attributable to shareholders was 347 million yuan, a decline of 53.75% year-on-year. In Q4 2024, revenue was 1.03 billion yuan, a year-on-year increase of 2.31%, but the net profit attributable to shareholders was a loss of 65 million yuan, down 141.72% year-on-year [6][12]. - The gross margin for 2024 is expected to increase by 0.35 percentage points to 38.34%, while the overall operating expense ratio is rising, leading to a net profit margin decrease of 5.94 percentage points to 8.04% [12]. Inventory and Demand - The company's inventory balance at the end of 2024 increased significantly to 1.851 billion yuan, reflecting proactive production and material reserves to ensure product delivery. The contract liabilities also increased to 137 million yuan, indicating a recovery in downstream demand [12]. Profit Forecast and Valuation - The forecast for net profit attributable to shareholders for 2025-2027 is 894 million yuan, 1.153 billion yuan, and 1.402 billion yuan, representing year-on-year growth of 158%, 29%, and 22%, respectively. The corresponding price-to-earnings ratios are projected to be 29, 22, and 18 times [12].