Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported a revenue of 12.198 billion yuan for the first three quarters of 2025, a year-on-year decline of 3.22%, with a net profit attributable to shareholders of 2.979 billion yuan, down 8.72% year-on-year [2] - The report indicates that the traditional business faced temporary pressure, while emerging businesses continued to expand [3] - The company is focusing on product innovation and brand image enhancement in the electrical connection business, while the smart electrical lighting business showed resilience [3] - The company is actively pursuing international expansion and has established good partnerships with major clients in the industry [3] Revenue Summary - The company’s revenue for Q3 2025 was 4.030 billion yuan, a year-on-year decrease of 4.44%, but the decline in revenue has narrowed compared to previous quarters [2] - The cash flow from operating activities for the first three quarters of 2025 was 3.621 billion yuan, an increase year-on-year [2] Profitability Summary - The gross profit margin for Q3 2025 was 41.68%, a decrease of 1.79 percentage points year-on-year, while the net profit margin was 22.81%, down 1.49 percentage points year-on-year [4] - The company has maintained effective cost control, with a slight decrease in the expense ratio [4] Investment Recommendations - The company is expected to gradually replicate its competitive advantages in new business areas such as LED lighting and renewable energy, moving towards becoming a giant in the consumer electrical sector [5] - Revenue forecasts for 2025-2027 are adjusted to 16.342 billion, 17.503 billion, and 18.693 billion yuan respectively, with EPS estimates of 2.22, 2.41, and 2.49 yuan [5] - The company maintains a "Buy" rating based on the adjusted earnings forecasts and current market conditions [5]

Investment Rating - The report does not provide a specific investment rating for the company [1] Core Insights - The company has experienced a slight decline in short-term performance, but it is actively exploring new growth opportunities [1] - The company maintains a strong focus on innovation and has established significant barriers in its core business while seeking to expand into new markets [1] Financial Performance Summary - For the first three quarters of 2025, the company achieved revenue of 12.198 billion yuan, a year-on-year decrease of 3.22%, and a net profit attributable to shareholders of 2.979 billion yuan, down 8.72% year-on-year [1] - In Q3 2025, the company reported revenue of 4.030 billion yuan, a decline of 4.44% year-on-year, and a net profit of 919 million yuan, down 10.29% year-on-year [1] Business Segment Analysis - **Electrical Connection Business**: The segment faces short-term pressure due to macroeconomic conditions affecting household and industrial activities. The company is innovating with new products and exploring new business areas like solar lights and data center PDU [2] - **Smart Electrical Lighting**: The segment is impacted by the real estate cycle but continues to innovate with new products and enhance its competitive edge through AI and health lighting systems [3] - **New Energy Business**: This segment is expected to maintain steady growth, with the company launching new charging products and expanding its service capabilities [3] - **International Expansion**: The company has expanded its reach to over 40 countries, leveraging a "big client model" to replicate its success in various regions [4] Profitability and Cost Management - The company's gross margin for Q3 2025 was 41.68%, a decrease of 1.79 percentage points year-on-year, while the net profit margin was 22.81%, down 1.49 percentage points year-on-year [5] - The company has effectively managed its expenses, with a total expense ratio of 15.44% in Q3 2025, a decrease of 1.04 percentage points year-on-year [5] Cash Flow and Operational Efficiency - The company demonstrated strong cash flow performance, with a net operating cash flow of 3.621 billion yuan for the first three quarters of 2025, an increase of 20.12% year-on-year [5] - Inventory management has improved, with year-end inventory at 1.168 billion yuan, significantly down from 1.574 billion yuan at the beginning of the year [5] Earnings Forecast - The company is projected to achieve net profits of 4.03 billion yuan, 4.47 billion yuan, and 5.04 billion yuan for 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 19.6X, 17.7X, and 15.7X [5][6]