Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company reported a revenue of 740 million yuan in Q1 2025, a year-on-year decrease of 2.17%, and a net profit attributable to shareholders of 99 million yuan, down 24.17% year-on-year [2][4]. - Despite short-term performance pressures, the company is expected to benefit from structural opportunities such as policy support, self-sufficiency, and international expansion in the medium to long term [2][4]. Summary by Sections Financial Performance - In Q1 2025, the company's revenue and profit both declined due to weak demand and intense price competition in the industry. The gross margin was approximately 25.93%, a decrease of 0.46 percentage points year-on-year, while the net profit margin was about 13.37%, down 3.88 percentage points year-on-year [4][9]. - The operating cash flow significantly improved, with a net cash flow from operating activities of 12 million yuan, a 106.33% increase year-on-year, primarily due to increased cash receipts from sales [9]. - R&D expenses reached 36 million yuan in Q1 2025, an increase of 8.08% year-on-year, maintaining a high R&D expense ratio of 4.85% [9]. Product Development and Market Strategy - The company has expanded its product line to meet market demands, successfully developing several new machine models and key components, enhancing product performance and automation capabilities [9]. - The company is advancing its production capacity and planning to establish overseas production capabilities, with a focus on enhancing its manufacturing base in Guangdong and launching a high-end CNC machine tool project in Ningbo [9]. Future Outlook - The company anticipates gradual improvement in performance as the manufacturing sector recovers, supported by the implementation of policies aimed at expanding market demand for machine tools [9]. - The projected net profits for 2025-2027 are expected to be 555 million yuan, 650 million yuan, and 759 million yuan, corresponding to price-to-earnings ratios of 18x, 15x, and 13x respectively [9].