Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 12.96 [7][8]. Core Views - The company reported a revenue of RMB 2.49 billion in 2024, a year-on-year decrease of 13.08%, while the net profit attributable to the parent company was RMB 169.24 million, an increase of 5.03% year-on-year. The decline in revenue is attributed to tight local government funding and slow progress in municipal infrastructure projects [1][4]. - In Q1 2025, the company achieved a revenue of RMB 521 million, down 19.1% year-on-year, with a net profit of RMB 42.83 million, a decrease of 17.78% year-on-year. The slow recovery of operations post-Spring Festival has put pressure on revenue recognition [1][4]. - The company maintains a positive outlook on infrastructure investment, particularly in water conservancy, which is expected to remain robust despite external tariff disruptions [1][4]. Summary by Sections Revenue and Profitability - The company’s main business gross margin for 2024 was 20.7%, a decrease of 2.4 percentage points year-on-year. The gross margins for PE, steel wire, anti-corrosion, insulation, and PVC were 22.75%, 31.2%, 19.1%, 10.9%, and 15.4%, respectively, showing declines across most segments [2][4]. - The company’s operating cash flow for 2024 was RMB 94.45 million, a significant decrease of 50.7% year-on-year, primarily due to reduced cash receipts from sales [3][4]. Financial Forecast and Valuation - The revenue forecast for 2025-2027 has been adjusted downwards, with net profit estimates revised to RMB 200 million, RMB 230 million, and RMB 270 million for 2025, 2026, and 2027, respectively. The corresponding EPS is projected to be RMB 0.72, RMB 0.83, and RMB 0.95 [4][6]. - The company is assigned a PE ratio of 18 times for 2025, reflecting an increase from the previous year's 16 times, with a target price set at RMB 12.96 [4][6].