Investment Rating - The report maintains a "Buy" rating for the company [9][15] Core Views - The company has reached an inflection point in its performance, with revenue and profit growth showing signs of recovery, although gross margins are temporarily under pressure due to supply chain issues [3] - The company reported a revenue of 18.087 billion yuan for the first three quarters of 2025, a year-on-year increase of 5.45%, while the net profit attributable to shareholders was 867 million yuan, a year-on-year decrease of 6.81% [3] - The company has seen significant growth in its major business segments, including smart control components and AI education products, which are benefiting from favorable policies [4][5][6] Summary by Sections Company Overview - Latest closing price: 36.38 yuan - Total shares: 696 million, circulating shares: 521 million - Total market capitalization: 25.3 billion yuan, circulating market capitalization: 19 billion yuan - 52-week high/low: 46.66/32.33 yuan - Debt-to-asset ratio: 42.1% - Price-to-earnings ratio: 25.80 [2] Financial Performance - For Q3 2025, the company achieved revenue of 7.522 billion yuan, a year-on-year increase of 6.96%, with a net profit of 469 million yuan, up 7.79% year-on-year [3] - The company’s inventory as of Q3 2025 was 3.719 billion yuan, a year-on-year increase of 60.67% [3] Business Segments - The board card business has shown significant growth due to deepened cooperation with major clients, while the home appliance controller business continues to benefit from rapid order growth [4] - The AI education segment has made notable progress, with the company's products leading the industry transformation [5] - The company is focusing on the long-term potential of robotics, with commercial robots beginning mass production and entering various markets [6] Profit Forecast - Revenue projections for 2025-2027 are 24.653 billion, 27.835 billion, and 31.485 billion yuan, with year-on-year growth rates of 10.05%, 12.91%, and 13.11% respectively [7] - Net profit forecasts for the same period are 1.026 billion, 1.303 billion, and 1.610 billion yuan, with growth rates of 5.70%, 26.92%, and 23.63% respectively [9]

Investment Rating - The report initiates coverage with a "Buy" rating for the company, setting a target price of 21.22 CNY per share based on a 30X PE for 2026 [5]. Core Viewpoints - The company has established comprehensive strategic partnerships with global clients such as PMI and Logitech, integrating multiple business segments including smart control components, innovative consumer electronics, health environment, and automotive electronics [3]. - The company has adopted an innovative UDM model, enhancing its competitive barriers through overseas capacity expansion and a dual strategy of "big triangle + small triangle" [3]. - The company plans to raise up to 800 million CNY through a private placement to fund the construction of manufacturing bases in Malaysia and Mexico, as well as to expand health environment product capacity and upgrade its R&D center [3]. - The HNB (Heated Not Burned) market remains robust, with PMI maintaining over 70% market share globally, and the company is expected to benefit from increased demand and a favorable supply chain position [3][4]. Summary by Sections 1. UDM System Achievements - The company has transitioned from a single product focus to a diversified growth strategy, leveraging its UDM model to enhance customer satisfaction and build strong partnerships with major clients [16][17]. - The UDM model integrates a unified management system with intelligent manufacturing, allowing for high flexibility and traceability, which improves client relationships [28][30]. 2. HNB Market Dynamics - The global shift towards new tobacco products is evident, with the HNB market expected to grow significantly, driven by consumer health concerns and PMI's established market position [40][43]. - PMI's early investments in HNB technology have created substantial barriers to entry for competitors, solidifying its market leadership [46][47]. 3. Diverse Business Growth - The company is experiencing growth across various segments, including innovative consumer electronics, automotive electronics, and health environment products, with strategic partnerships enhancing its market position [4][20]. - The automotive electronics sector is particularly promising, with the company entering the supply chains of major domestic new energy vehicle manufacturers [4][20]. 4. Financial Forecasts - Revenue projections for 2025-2027 are 4.498 billion CNY, 5.669 billion CNY, and 7.099 billion CNY, reflecting year-on-year growth rates of 25.91%, 26.03%, and 25.21% respectively [5][9]. - Net profit forecasts for the same period are 405 million CNY, 550 million CNY, and 703 million CNY, with corresponding growth rates of 61.09%, 35.75%, and 27.89% [5][9].