Core Viewpoint - The company reported a revenue increase of 15.68% year-on-year for the first three quarters of 2025, but net profit decreased by 29.25% primarily due to financial expenses related to convertible bonds, indicating stable operational performance despite the profit drop [1] Financial Performance - Revenue for the first three quarters reached 1.586 billion yuan, a 15.68% increase year-on-year [1] - Net profit attributable to shareholders was 71.21 million yuan, a decrease of 29.25% compared to the previous year [1] - Financial expenses amounted to 6.06 million yuan, an increase of 22.99 million yuan year-on-year, mainly due to interest accrual on convertible bonds [1] - The gross profit margin stood at 25.28%, reflecting stable profitability [1] Market Dynamics - The new energy vehicle market continues to grow, with total vehicle sales reaching 21.246 million units from January to September 2025, a 13.7% increase year-on-year, and new energy vehicle sales at 11.228 million units, up 34.9% [2] - The demand for charging infrastructure is increasing, with a current vehicle-to-charging pile ratio of 2.57:1, indicating significant market potential [2] Policy Environment - Recent policies aim to accelerate the construction of charging facilities and support the growth of the new energy vehicle market, including a plan to add 1.6 million DC charging guns by the end of 2027 [3] - The policies are designed to expand the market, increase demand, and alleviate competitive pressure, potentially restoring the company's gross margin to the 30% range [3] Technological Advancements - The company is positioned at the forefront of the industry with its liquid-cooled ultra-fast charging technology, capable of meeting high power requirements of 1000V and 1200A [4] - Collaborations with major automotive manufacturers like Huawei and BYD enhance the company's competitive edge and market presence [4] Future Growth Prospects - The rapid development of the charging gun and pile business, along with the company's advancements in high-end connectors, is expected to drive significant order growth [5] - The company is actively expanding its product offerings in emerging industries, including liquid cooling solutions for computing servers and products for humanoid robots and flying cars [5] - The focus on high-end connector applications in future industries positions the company for sustained growth and market leadership [5]

Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 299.8 CNY per share based on a 40x PE for 2026 [1]. Core Viewpoints - The company is a leading player in the charging module industry, benefiting significantly from the increasing demand for high-power fast charging solutions. It has a market share of 16% in the domestic charging module market as of 2024, ranking second in the industry [6][12]. - The company has a strong R&D foundation, with over 50% of its employees dedicated to research and development, and a high R&D expense ratio of 8.3% in the first half of 2025 [6][12]. - The company is expanding into the HVDC (High Voltage Direct Current) market, leveraging its existing technology and customer relationships to capture new growth opportunities [6][12]. Summary by Sections 1. Charging Module Industry Leadership - The company has been deeply involved in the development of high-power charging modules, with a product range covering 15kW to 40kW modules, which are widely used in DC charging stations and cabinets [12][21]. - Revenue growth has been steady, with reported revenues of 9.88 billion CNY in 2022, 13.76 billion CNY in 2023, and 14.97 billion CNY in 2024, reflecting a strong market position [6][23]. - The company has faced challenges in profitability due to intense domestic price competition and a slowdown in overseas demand, but it is expected to return to growth in 2026 [6][12]. 2. Market Demand and Trends - The global demand for electric vehicles is projected to grow significantly, with an expected 27% increase in sales in 2024, driving the need for efficient charging solutions [43][44]. - The domestic market for public charging stations is expanding rapidly, with a notable increase in the number of high-power DC charging stations, which is expected to continue [48][52]. - The company is well-positioned to benefit from the increasing penetration of high-power charging modules, particularly in the electric heavy truck market [6][12]. 3. Financial Projections - The company’s net profit is projected to decline to 203.51 million CNY in 2025, followed by a recovery to 314.76 million CNY in 2026 and 507.15 million CNY in 2027, indicating a strong rebound [1]. - The report anticipates a significant increase in the company's valuation, with a PE ratio expected to drop from 48x in 2025 to 19x in 2027, reflecting improved profitability and growth prospects [1][6]. 4. HVDC Market Potential - The company is strategically positioning itself in the HVDC market, which is expected to see high growth due to increasing capital expenditures in the AIDC (Automated Industrial Data Center) sector [6][12]. - The company plans to leverage its existing technology and customer relationships to quickly enter the HVDC market, with product launches anticipated in 2026 [6][12].