Investment Rating - The investment rating for the company is "Buy" and it is maintained [7]. Core Views - The company reported a significant improvement in gross margin, with key project deliveries expected to support future growth [4][5]. - In the first half of 2025, the company achieved operating revenue of 6.45 billion yuan, a year-on-year decrease of 5.7%, while net profit attributable to shareholders was 630 million yuan, an increase of 1.0% [2][4]. - The second quarter of 2025 saw a recovery with operating revenue of 4.1 billion yuan, a year-on-year increase of 1.8% and a quarter-on-quarter increase of 74.6% [2][4]. Summary by Sections Revenue Performance - The company's revenue from various segments in the first half of 2025 included: - Smart distribution and transformation systems: 1.847 billion yuan, down 13.0% year-on-year - Smart meters: 1.528 billion yuan, down 4.4% year-on-year - Smart medium-voltage power supply equipment: 1.339 billion yuan, down 5.5% year-on-year - New energy and system integration: 696 million yuan, down 30.4% year-on-year - Charging and swapping equipment: 577 million yuan, up 4.9% year-on-year - DC transmission systems: 460 million yuan, up 211.7% year-on-year [9]. Gross Margin Analysis - The gross margin for the first half of 2025 reached 23.75%, an increase of 2.85 percentage points year-on-year. In Q2 2025, the gross margin was 23.91%, up 1.17 percentage points year-on-year and 0.44 percentage points quarter-on-quarter [9]. - Segment-wise gross margins included: - Smart distribution systems: 26.93%, up 3.81 percentage points year-on-year - Smart meters: 24.06%, down 3.50 percentage points year-on-year - Smart medium-voltage equipment: 23.67%, up 3.34 percentage points year-on-year - New energy systems: 10.61%, up 4.11 percentage points year-on-year - Charging equipment: 15.23%, up 2.79 percentage points year-on-year - DC transmission systems: 40.76%, down 10.74 percentage points year-on-year [9]. Expense Management - The total expense ratio for the first half of 2025 was 11.70%, an increase of 2.08 percentage points year-on-year. The breakdown included: - Selling expense ratio: 4.23%, up 1.01 percentage points - Management expense ratio: 3.14%, up 0.18 percentage points - R&D expense ratio: 4.71%, up 0.85 percentage points - Financial expense ratio: -0.39%, up 0.03 percentage points [9]. Cash Flow and Future Outlook - The company reported a net operating cash flow of 1.12 billion yuan in the first half of 2025, a year-on-year increase of 237.1%. In Q2 2025, the cash flow reached 957 million yuan, a year-on-year increase of 1232.0% [9]. - Future growth is expected to be supported by the delivery of key projects such as Qingzhou Wuhai Wind and Gan-Zhe converter valve orders, along with ongoing cost reduction and efficiency improvements. The projected net profit for 2025 is estimated to reach 1.4 billion yuan, corresponding to a PE ratio of approximately 17X [9].

Investment Rating - The report maintains a "Recommended" rating for XJ Electric (000400.SZ) [1] Core Views - The company achieved a revenue of 6.447 billion yuan in H1 2025, a year-on-year decrease of 5.68%, while the net profit attributable to shareholders was 634 million yuan, an increase of 0.96% year-on-year [4] - The company is expected to benefit from the high growth in UHV (Ultra High Voltage) projects, with significant investments planned in the coming years [4] - Domestic revenue increased by 7.41% year-on-year to 6.192 billion yuan in H1 2025, while overseas revenue surged by 72.68% to 255 million yuan [4] Summary by Sections Financial Performance - H1 2025 revenue was 6.447 billion yuan, with a net profit of 634 million yuan, reflecting a 0.96% increase year-on-year [4] - Q2 2025 saw a revenue of 4.099 billion yuan, a 1.81% increase year-on-year and a 74.56% increase quarter-on-quarter [4] - The gross profit margin for Q2 2025 was 23.91%, showing a year-on-year increase of 1.17 percentage points [4] Business Segments - Intelligent distribution systems generated 1.847 billion yuan in revenue, down 13.01% year-on-year, while smart meters brought in 1.528 billion yuan, down 4.44% [4] - The direct current transmission system revenue skyrocketed by 211.71% to 460 million yuan, indicating strong demand in this segment [4] Market Position - The company maintains a leading position in the domestic market, with significant contracts in the railway monitoring and protection sector [4] - Internationally, the company has expanded its presence in markets such as Saudi Arabia, Brazil, and Spain, with a notable increase in overseas revenue [4] Future Outlook - The company is projected to achieve revenues of 17.762 billion yuan and 18.788 billion yuan in 2025 and 2026, respectively, with net profits expected to reach 1.386 billion yuan and 1.687 billion yuan [5] - The report anticipates continued growth driven by increased investments in the power grid and the company's strong capabilities in UHV and smart grid businesses [4]

Core Viewpoint - The company reported its 2024 annual and 2025 Q1 financial results, showing mixed performance with slight revenue growth in 2024 but a decline in Q1 2025 [1][2]. Financial Performance - For 2024, total revenue reached 17.09 billion, a year-on-year increase of 0.2%, while net profit attributable to shareholders was 1.12 billion, up 11.1% year-on-year [1]. - In Q4 2024, revenue was 7.50 billion, reflecting a year-on-year increase of 17.3% and a quarter-on-quarter increase of 172.8% [1]. - For Q1 2025, revenue dropped to 2.35 billion, a decrease of 16.4% year-on-year [1]. Segment Performance - In 2024, revenue from the smart distribution and transformation system was 4.71 billion, up 2.9% year-on-year; smart meters generated 3.87 billion, up 11.0% [2]. - The revenue from new energy and system integration fell significantly by 37.5% to 2.46 billion, while the direct current transmission system revenue surged by 101.6% to 1.44 billion [2]. - The company’s foreign revenue in 2024 was 309 million, an increase of 102.2% year-on-year [2]. Profitability Metrics - The overall gross margin for 2024 was 20.77%, an increase of 2.78 percentage points year-on-year [3]. - In Q4 2024, the gross margin was 19.28%, up 2.50 percentage points year-on-year but down 5.24 percentage points quarter-on-quarter [3]. - The gross margin for Q1 2025 improved to 23.47%, a year-on-year increase of 5.20 percentage points [3]. Expense Ratios - The total expense ratio for 2024 was 12.54%, an increase of 1.68 percentage points year-on-year, with the sales expense ratio at 4.22%, up 1.34 percentage points [4]. - In Q1 2025, the total expense ratio rose to 13.07%, with the sales expense ratio increasing to 4.77%, reflecting a significant rise [4]. Future Outlook - The company aims for a revenue target of 18.3 billion in 2025, with expectations of growth in the distribution and medium voltage sectors [4]. - The projected net profit for 2025 is 1.45 billion, corresponding to a price-to-earnings ratio of approximately 15 times [4].

Investment Rating - The investment rating for the company is "Buy" and it is maintained [7] Core Views - The company reported a slight increase in revenue for 2024, with total revenue of 17.09 billion yuan, up 0.2% year-on-year. The net profit attributable to shareholders was 1.12 billion yuan, an increase of 11.1% year-on-year, while the net profit excluding non-recurring items was 1.06 billion yuan, up 22.2% year-on-year [2][4] - In Q4 2024, the company achieved a revenue of 7.50 billion yuan, representing a year-on-year increase of 17.3% and a quarter-on-quarter increase of 172.8%. However, the net profit attributable to shareholders decreased by 4.7% year-on-year to 220 million yuan [2][4] - For Q1 2025, the company reported a revenue of 2.35 billion yuan, down 16.4% year-on-year, and a net profit of 210 million yuan, down 12.5% year-on-year [2][4] Financial Performance - The company's revenue from various segments in 2024 included: - Smart distribution and transformation systems: 4.71 billion yuan, up 2.9% - Smart meters: 3.87 billion yuan, up 11.0% - Smart medium-voltage power supply equipment: 3.35 billion yuan, up 6.7% - New energy and system integration: 2.46 billion yuan, down 37.5% - DC transmission systems: 1.44 billion yuan, up 101.6% - Charging and swapping equipment and other manufacturing services: 1.25 billion yuan, up 4.2% [10] - The overall gross margin for 2024 was 20.77%, an increase of 2.78 percentage points year-on-year. The gross margin for Q4 2024 was 19.28%, up 2.50 percentage points year-on-year but down 5.24 percentage points quarter-on-quarter [10] - The company’s total expenses ratio for 2024 was 12.54%, an increase of 1.68 percentage points year-on-year, with the sales expense ratio at 4.22%, up 1.34 percentage points [10] Future Outlook - The company has set a financial target for 2025 to achieve a revenue of 18.3 billion yuan. The expected net profit attributable to shareholders for 2025 is projected to reach 1.45 billion yuan, corresponding to a PE ratio of approximately 15 times [10]