Core Viewpoint - Kelu Electronics has shown significant improvement in its financial performance, achieving its best quarterly net profit in three years, driven by non-recurring gains such as government subsidies and the reversal of impairment provisions [1] Financial Performance - In Q1 2025, Kelu Electronics reported total revenue of 1.214 billion yuan, a year-on-year increase of 16.20%, and a net profit attributable to shareholders of 67.45 million yuan, up 857.45% year-on-year, primarily due to non-recurring gains [1] - For 2024, the company recorded total revenue of 4.431 billion yuan, a year-on-year growth of 5.50%, with Q4 revenue reaching 1.53 billion yuan, up 78.5% year-on-year [2] - Despite revenue growth, the company reported a net loss of 464 million yuan for 2024, attributed to depreciation expenses and foreign exchange losses [3] Historical Challenges and Restructuring - Kelu Electronics faced significant challenges from aggressive expansion between 2018-2019, leading to substantial losses, but received support from Shenzhen Capital Group in 2020 [2] - The company has been actively divesting non-core assets, reducing the number of subsidiaries from 107 in 2018 to 48 currently, to alleviate historical burdens [4] Business Segments - The smart grid segment remains a cornerstone of Kelu Electronics, generating 2.865 billion yuan in revenue for 2024, a 10.61% increase, and accounting for 64.65% of total revenue with a gross margin of 32.27% [5] - The company has faced setbacks due to being blacklisted by Southern Power Grid for 18 months, impacting its operations [6] Growth Opportunities - Kelu Electronics is pivoting towards the energy storage business, securing new projects with a total capacity of approximately 2.4 GWh in 2024, and expanding its presence in international markets [7] - The company is leveraging Midea Group's supply chain advantages to enhance its commercial energy storage business, with a notable increase in inventory to 1.078 billion yuan due to strategic stockpiling for contract fulfillment [8] Management Changes and Future Goals - Following Midea Group's acquisition, Kelu Electronics has undergone management changes, with the appointment of a new chairman focused on profitability targets [8] - The company has set ambitious performance targets for 2025-2027, aiming for revenue growth of no less than 43%, 90%, and 150% respectively, and net profit targets of 20 million yuan, 110 million yuan, and 370 million yuan [8]