Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company reported a revenue of 4.168 billion RMB for 2025, representing a year-on-year increase of 11.64%, and a net profit attributable to the parent company of 531 million RMB, up 20.53% year-on-year. The fourth quarter revenue was 1.39 billion RMB, down 2.26% year-on-year but up 55.45% quarter-on-quarter, with a net profit of 197 million RMB, reflecting a year-on-year increase of 5.03% and a quarter-on-quarter increase of 114.58% [1][7] - The company is optimistic about its ongoing focus on the new energy and electrical transmission sectors, continuously optimizing its product structure and enhancing its overall competitiveness while accelerating global market expansion to unlock long-term growth potential [1][7] Summary by Sections Financial Performance - In Q4 2025, the net profit margin was 14.37%, an increase of 1.18 percentage points year-on-year and 3.86 percentage points quarter-on-quarter, primarily driven by changes in product structure that boosted gross margins, along with a decrease in operating expense ratios. The gross margin for Q4 was 40.24%, up 1.75 percentage points year-on-year and 2.83 percentage points quarter-on-quarter. The operating expense ratio for Q4 was 17.90%, down 3.16 percentage points year-on-year and 11.08 percentage points quarter-on-quarter [2] - The company recorded a net cash flow from operating activities of 396 million RMB in Q4, an increase of 26.89% year-on-year [2] Business Segments - For 2025, the company's new energy control business generated revenue of 3.291 billion RMB, up 15.06% year-on-year, with a gross margin of 33.43%, down 0.24 percentage points year-on-year. In Q4, the revenue was 1.013 billion RMB, down 4.3% year-on-year but up 34.3% quarter-on-quarter, with a gross margin of 34.05% [3] - The engineering transmission business generated revenue of 627 million RMB in 2025, up 11.53% year-on-year, with a gross margin of 51.60%, up 7.14 percentage points year-on-year. In Q4, the revenue was 316 million RMB, up 28.6% year-on-year and 271.6% quarter-on-quarter, attributed to accelerated domestic substitution and overseas expansion, along with concentrated revenue recognition at year-end. The gross margin for Q4 was 56.17%, up 7.64 percentage points year-on-year and 11.19 percentage points quarter-on-quarter [3] Global Expansion - The company's overseas revenue for 2025 was 369 million RMB, an increase of 42.11% year-on-year, with a gross margin of 50.31%, down 3.93 percentage points year-on-year. In Q4, the overseas revenue was 144 million RMB, up 63.9% year-on-year and 87.1% quarter-on-quarter, primarily due to growth in wind power and transmission business overseas. The gross margin for Q4 was 41.08%, down 19.35 percentage points year-on-year and 18.17 percentage points quarter-on-quarter. The company has established service points across over 30 locations, including Brazil, Turkey, South Korea, Vietnam, India, and the Netherlands, and has launched a manufacturing base in Hungary to provide localized products and services for the European and global markets [4] Profit Forecast and Valuation - The company has revised down its net profit forecast for 2026-2027 by 7.89% and 9.85% to 650 million RMB and 746 million RMB, respectively, with an expected net profit of 854 million RMB for 2028. The corresponding EPS is projected to be 1.42, 1.63, and 1.86 RMB. The downward revision is mainly due to intensified market competition in the wind and solar sectors, leading to a reduction in revenue growth and gross margin assumptions for the new energy control business. The target price has been raised to 39.73 RMB, corresponding to a 28 times PE valuation for 2026 [5]