Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 53.55 [6][5]. Core Insights - The company achieved a revenue of RMB 8.193 billion in 2025, representing a year-on-year growth of 17.87%, and a net profit attributable to shareholders of RMB 829 million, up 15.84% year-on-year [1][2]. - The company is a leader in the domestic secondary equipment industry for power grids, with steady growth in both internal and external business segments. The introduction of solid-state transformers (SST) aimed at the AIDC sector is expected to provide new profit growth points [1][4]. - The company signed new contracts worth RMB 10 billion in 2025, a 16.7% increase year-on-year, with significant growth in various business segments, including a 20% increase in the power generation sector [3]. Summary by Sections Financial Performance - In 2025, the company reported a gross margin of 30.22% and a net margin of 10.12%, with a slight decline in margins due to product mix effects. The operating expense ratio was 18.46%, down 2.05 percentage points year-on-year [2]. - The company forecasts a net profit of RMB 990 million for 2026, with a slight increase in the 2027 forecast to RMB 1.17 billion [5][10]. Business Development - The company has launched SST prototypes for the AIDC sector, which are expected to enhance profitability. The SST products have high efficiency and reliability, with several benchmark projects already in place [4]. - The international business segment has shown robust growth, with new orders reaching RMB 500 million, a 60% increase year-on-year, driven by power electronics and integrated products [3]. Market Position and Valuation - The company is positioned to benefit from the growing demand in the power grid and renewable energy sectors, with a projected revenue growth of 19.48% in 2026 and 18.35% in 2027 [10]. - The report assigns a PE ratio of 45 times for 2026, reflecting the company's leading position in SST technology and its growth potential in the AIDC market [5].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 35.70 RMB [7][5]. Core Views - The company is expected to continue its stable growth in the domestic power grid secondary equipment industry, with significant breakthroughs in external business [1]. - The solid-state transformer (SST) technology is leading in the domestic market and is anticipated to create new profit growth points in the data center sector [4]. - The company’s overall profitability is projected to remain upward, supported by its advanced technology and successful benchmark cases [5]. Summary by Sections Financial Performance - In Q3 2025, the company achieved revenue of 2.11 billion RMB, a year-over-year increase of 30.65% and a quarter-over-quarter decrease of 3.69% [1]. - For the first three quarters of 2025, the company reported revenue of 6.13 billion RMB, a year-over-year increase of 20.39%, and a net profit of 704 million RMB, up 15.57% year-over-year [2]. Profitability Metrics - The gross margin for Q1-Q3 2025 was 30.77%, down 2.93 percentage points year-over-year, while the net margin was 11.47%, down 0.51 percentage points year-over-year [2]. - The company’s overall expense ratio for Q1-Q3 2025 was 17.64%, a decrease of 2.54 percentage points year-over-year [2]. Technology and Market Position - The company offers a range of SST products with high efficiency (up to 99%) and reliability (99.99%), positioning it as a key player in the data center power distribution system [4]. - The company is one of the few in China capable of providing critical equipment and solutions for both AC and DC power distribution systems in data centers [4]. Earnings Forecast and Valuation - The company’s projected net profits for 2025-2027 are 844.93 million RMB, 987.86 million RMB, and 1.15 billion RMB, respectively, with a compound annual growth rate of 17.14% [5]. - The report assigns a 30x PE ratio for 2026, reflecting the company’s leading SST technology and growth potential in the AIDC business [5].