Investment Rating - The report maintains a "Buy" rating for the company Calet (301391) with a target price set at 55.18 [1][7]. Core Views - The company is positioned as a leading enterprise in the LED display control industry, focusing on video processing algorithms and hardware solutions for video image fields [4][14]. - The company is experiencing a recovery in performance growth while actively transforming towards AI technologies [1][9]. - The LED display industry is evolving towards precision and high-definition, with small-pitch LED and ultra-high-definition video driving long-term growth for the company [5][34]. Summary by Sections Company Overview - Calet was established in January 2012 and provides comprehensive solutions in video image fields, with products including LED display control systems, video processing equipment, and cloud-connected players [4][14]. - The company has a clear shareholding structure with a high concentration of ownership, and its management team possesses strong technical backgrounds [20][23]. Industry Trends - The LED display industry is witnessing a shift towards precision and high-definition, with the cost of small-pitch LED displays decreasing, thus expanding downstream application scenarios [34][38]. - The global LED display market is expected to grow, with a projected CAGR of 7% from 2023 to 2028 [34]. Competitive Positioning - The company's products are considered the "brain" of LED displays, directly influencing the stability and display quality of LED screens [56][58]. - The company has established deep partnerships with leading LED display manufacturers, creating high barriers to entry for competitors [5][6]. Financial Performance and Forecast - The company’s revenue is projected to recover, with expected revenues of 7.45 billion, 8.76 billion, and 10.59 billion yuan for 2025, 2026, and 2027 respectively [7][8]. - The gross profit margin has shown an upward trend, increasing from 40.25% in 2020 to 44.01% in 2024 [28][31]. Product Development - The company is expanding its product matrix to lead the AI + display control technology transformation, launching new AI-driven display solutions [6][31]. - The introduction of high-margin products such as video processing equipment and cloud-connected players is expected to enhance revenue growth [29][30].

Group 1: Cost Optimization Strategies - The company plans to implement strict control over procurement processes and collaborate closely with suppliers to reduce raw material costs through centralized purchasing and long-term agreements [2] - There will be a focus on optimizing production processes to minimize waste and enhance production efficiency, thereby lowering the unit production cost [2] - The company aims to strictly control sales and management expenses, cutting unnecessary non-core expenditures [2] Group 2: Business Growth and Market Expansion - The company is committed to R&D in LED display control and video processing, with core products including LED display control systems and video processing equipment [3] - Plans for future market expansion include increasing sales personnel and establishing overseas marketing networks to enhance brand recognition and market influence [4] - The company has allocated 20.94% of its revenue (approximately 134.64 million yuan) for R&D in 2024, focusing on innovative products and solutions [4] Group 3: Financial Performance - In Q1 2025, the company reported total revenue of 105.57 million yuan and a net profit of 3.15 million yuan [4] - The gross margins for various products in 2024 are as follows: receiving cards at 21.00%, transmitters at 48.55%, video processing equipment at 57.38%, and cloud-connected players at 51.30% [5] Group 4: Risk Management - The company faces several risks, including market competition, high customer concentration, technology upgrade risks, and exchange rate fluctuations [4] - To mitigate these risks, the company is enhancing its overall strength by leveraging its brand and capital advantages, improving product quality, and expanding its R&D team [4] Group 5: Future Growth Drivers - The company aims to achieve operational quality improvement through a dual strategy of "technological innovation + operational management optimization" [5] - It is focusing on high-growth business segments such as video processing equipment and software platforms, while reducing low-margin product lines [5] - The company is positioned to benefit from the ultra-high-definition display industry's market opportunities, forming a complete solution capability across hardware, software, and services [5]