Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - In 2024, the company experienced a slight decline in revenue by 2.7% year-on-year, totaling 2.589 billion yuan, while net profit attributable to shareholders decreased significantly by 25.8% to 294 million yuan [1][2] - The company's sales volume of gear reducers increased by approximately 5% year-on-year, indicating a rise in market share despite a decrease in revenue due to intensified competition and falling product prices [2] - The company is focusing on expanding its high-end product lines and has launched new products targeting the injection molding and rubber-plastic industries, which are expected to drive future growth [3] Revenue and Profit Summary - In 2024, the company achieved a revenue of 2.589 billion yuan, with a gross profit margin of 21.1%, down 4.9 percentage points year-on-year [1][2] - The company's gear reducer revenue was 1.951 billion yuan, down 5.0% year-on-year, while the revenue from cycloidal pinwheel reducers was 356 million yuan, down 7.5% [2] - The report forecasts a decline in net profit for 2025 and 2026, with expected figures of 346 million yuan and 416 million yuan respectively, while projecting a recovery to 479 million yuan by 2027 [3][9] Financial Metrics - The report provides a detailed financial forecast, indicating a projected revenue growth rate of 13.99% in 2025 and 14.25% in 2027 [4][9] - The company's earnings per share (EPS) is expected to recover from 0.45 yuan in 2024 to 0.73 yuan in 2027 [4][11] - The return on equity (ROE) is projected to improve from 8.02% in 2024 to 10.65% in 2027 [4][11] Market Position and Strategy - The company is expanding its market presence in various sectors, including water conservancy, mining, non-ferrous metals, and oil, to mitigate the impact of declining demand in the lithium battery sector [3] - The introduction of new products such as the DHI series electric pre-plastic gearboxes and TEH series gearboxes is aimed at meeting customer demands for efficiency improvements [3]