Investment Rating - The report maintains a "Buy" rating for the company [5]. Core Insights - The company is expected to achieve significant growth in its two-wheeler segment, with projected sales of 2.6 million and 2.39 million units for 2024 and the first half of 2025, respectively, representing year-on-year growth of 77% and 100% [1][27]. - The gross margin is anticipated to continue rising, reaching 21.1% and 23.7% for 2024 and the first half of 2025, placing the company in a leading position within the industry [1][31]. Summary by Sections Two-Wheeler Business - The company focuses on providing a full lifecycle user experience for its core target audience, with a strong emphasis on smart technology as a key differentiator in its product offerings [2][42]. - The company has established a robust brand presence, with a significant portion of its sales coming from younger consumers, who represent 66% of its customer base under 35 years old [2][47]. - The company has successfully optimized its product structure and achieved economies of scale, leading to a continuous increase in gross margins [1][31]. Research and Development System - The company's R&D system is characterized by a high degree of coupling among its organizational structure, mechanisms, and talent, which is crucial for maintaining competitive advantages [3][22]. - The dual-line R&D mechanism allows the company to balance short-term and long-term goals effectively, ensuring continuous innovation [3][22]. Future Outlook - The company plans to expand its store network significantly, with projections of 7,600 and 8,700 stores for 2024 and the first half of 2025, respectively, and aims to reach 9,500 stores by the end of 2025 [3][26]. - Continuous upgrades to its Over-The-Air (OTA) services will enhance user experience throughout the product lifecycle [3][26]. Profit Forecast and Valuation - The company is projected to achieve net profits of 2 billion, 2.7 billion, and 3.5 billion yuan for 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 23, 18, and 14 [4][5].

Summary of the Conference Call Company Overview - The company is a leading manufacturer of gas meters and flow meters in China, with production bases in Shanghai and Wuhu, and an annual production capacity exceeding 10 million units, employing over 2,000 people and holding more than 700 intellectual property rights [2][3][4] - Established in 2011 and listed on the Shenzhen Stock Exchange's Growth Enterprise Market in February 2023, raising approximately 2 billion RMB through an IPO [3][5] - The company has a comprehensive industrial chain layout, covering mold development, component manufacturing, software development, and automated assembly, significantly reducing costs and enhancing gross margins, which exceeded 40% as of mid-2025 [2][7] Financial Performance - From 2018 to 2024, revenue grew from 448 million RMB to 1.501 billion RMB, with a compound annual growth rate (CAGR) of 22%, while profit increased from 93 million RMB to 321 million RMB, with a CAGR of 20% [12][13] - The company expects a revenue growth of 25% to 30% and a profit growth of approximately 20% for the full year of 2025 [33] Product and Market Development - The product matrix includes gas meters (including smart and ultrasonic types) and flow meters, with the company entering the water meter business in 2024 [6][4] - The company has established four R&D centers in Shanghai, Beijing, Xi'an, and Hangzhou, focusing on different technological fields and holding over 700 intellectual property rights [8][19] - The company has received certifications for its gas meter products from Australia and Peru, highlighting product durability and technical strength [9] Market Position and Customer Base - The company has over 2,000 domestic customers, including major gas groups, and has established joint ventures to stabilize sales channels [10] - In 2024, the company exported products to 60 countries, with overseas revenue growing nearly 62% year-over-year [11][4] Strategic Initiatives - The company plans to enhance its overseas market penetration and local production in mature regions, leveraging the Cinder brand for international expansion [14][16] - The company is also diversifying into water meters and automotive parts, with the automotive parts project expected to start production by the end of 2025 [4][21] Challenges and Future Outlook - The gas meter industry has stable downstream demand, with a replacement cycle of approximately 10 years, driven by safety regulations and technological upgrades [15] - The company faces challenges in increasing overseas market penetration, with varying price sensitivities among international customers [16][17] - The automotive parts business has lower gross margins, but the company aims to replicate its successful gas meter production model to improve profitability [26] Additional Insights - The company is considering employee stock ownership plans to retain talent and align interests [27] - The company has significant accounts receivable, but risks are manageable due to strong credit management among major clients [31] - The company is exploring new business areas, including robotics, while continuing to expand its water meter and automotive parts businesses [35]