Investment Rating - The report gives a "Buy" rating for the company, Xiangheng International, based on its growth potential in the MRO market and improving profitability metrics [8]. Core Insights - Xiangheng International is a leading player in the domestic MRO centralized supply market, showing a significant turning point in profitability with a revenue of 3.606 billion yuan in 2024, a year-on-year increase of 23.15%, and a net profit of 223 million yuan, up 130.67% year-on-year [5][19]. - The MRO procurement service market in China is projected to reach 3.7 trillion yuan in 2024, with a compound annual growth rate (CAGR) of 6.1% from 2019 to 2024, indicating a vast market opportunity [6][30]. - The company is expanding its service capabilities into five new strategic industries, aiming to replicate its success in the power sector across oil and gas, government emergency services, transportation, nuclear industry, and power generation sectors [7][40]. Summary by Sections Company Overview - Xiangheng International, established in 2008, is a leading MRO centralized supplier in China, primarily serving the power industry and expanding into other sectors [17]. - The company offers over one million SKUs across 12 categories of tools and instruments, along with technical services [5][17]. Market Potential - The MRO procurement market in China is still in the early stages of penetration, with significant room for growth as centralized procurement becomes more prevalent [6][26]. - The market is expected to grow to 4.5 trillion yuan by 2029, with a CAGR of 4.2% from 2024 to 2029 [6][30]. Competitive Landscape - The MRO market in China is characterized by low concentration and intense competition, with major competitors including Wuhan Jujing, Lide Electric, and Zhenkunxing [7][54]. - Xiangheng International's business model focuses on deepening service capabilities and understanding customer needs, particularly in large state-owned enterprises [36][51]. Financial Projections - Revenue projections for Xiangheng International are 4.456 billion yuan in 2025, 5.204 billion yuan in 2026, and 5.957 billion yuan in 2027, with corresponding growth rates of 23.6%, 16.8%, and 14.5% respectively [8][10]. - The company is expected to maintain a strong net profit growth trajectory, with net profits projected at 261 million yuan in 2025, 309 million yuan in 2026, and 367 million yuan in 2027 [8][10]. Strategic Initiatives - The company is implementing five new strategic initiatives to enhance its service offerings and increase the proportion of non-standard products and technical services [40][43]. - Xiangheng International aims to leverage its experience in the power sector to expand into new industries, enhancing customer stickiness and competitive advantage [7][40].