Financial Performance - In 2024, the company's operating revenue increased by 9.12% year-on-year, but the net profit attributable to shareholders was 93.45 million, a year-on-year loss expansion of 64.47% due to high R&D and equipment depreciation costs [1] - In Q1 2025, operating revenue grew by 6.77%, but the net profit loss expanded to 38.46 million, attributed to ongoing R&D and sampling costs, as well as increased equipment depreciation [2] - The company's financial expenses in 2024 rose by 1080.22% to 6.43 million, primarily due to new bank loans and discounts [5] Asset Management - Asset impairment losses in 2024 increased by 80.99%, mainly due to inventory write-downs and fixed asset impairments [3] - The inventory turnover rate in Q1 2025 decreased by 62.94%, prompting plans for improved inventory management [4] Cash Flow and Debt Management - In Q1 2025, net cash flow from operating activities increased by 230.25%, while cash reserves decreased by 27.13% due to increased investment expenditures [10] - The company's interest-bearing debt grew by 25.80%, with short-term loans amounting to 155 million, but the overall scale remains manageable [13] Market Strategy and Innovation - The company faces challenges from U.S.-China decoupling and increased competition, but plans to stabilize core resources and explore new markets [6][7] - The company aims to enhance R&D investment and improve product quality to increase gross margins, which were -14.13% in Q1 2025 [8][9] - The company has achieved significant results in market expansion, becoming a qualified supplier for major clients [7] Accounts Receivable Management - Accounts receivable increased significantly in 2024, with credit impairment losses rising by 230.18%, but the company maintains a strategy to control customer credit risk [7]

Investment Rating - The investment rating for the company is "Accumulate" [1] Core Views - The company achieved a revenue of 232.39 million yuan in 2024, representing a year-on-year growth of 10.09%, while the net profit attributable to shareholders decreased by 40.81% to 21.06 million yuan [2] - The decline in profit is attributed to increased costs, including depreciation and interest expenses, following the completion of the new factory, as well as a reduction in government subsidies [2] - The company has successfully entered small-scale production of harmonic reducers, which is expected to open up growth opportunities [3][4] Summary by Sections Financial Performance - Total revenue for 2024 is projected at 232.39 million yuan, with a year-on-year increase of 10.09% [2] - Net profit attributable to shareholders is forecasted at 21.06 million yuan, down 40.81% year-on-year [2] - The gross profit margin is 36.31%, an increase of 0.97 percentage points year-on-year, while the net profit margin is 9.06%, a decrease of 7.79 percentage points year-on-year [2] Business Segments - Sales of precision mechanical components grew steadily, with product revenue reaching 180 million yuan, up 17.78% year-on-year, accounting for 77.52% of total revenue [3] - Processing revenue was 45 million yuan, down 13.06% year-on-year, making up 19.39% of total revenue [3] - The harmonic reducer segment has completed design and internal technical verification, positioning the company for market responsiveness and production capability [3][4] Growth Potential - The company is positioned as a leader in its niche, with a focus on high precision and quality, serving major clients such as THK and Yaskawa Electric [4] - The harmonic reducer market is expected to provide a second growth curve, with applications in industrial and service robots [4] - The company is actively engaging with potential customers for its self-developed harmonic reducers, with some small batch orders already received [4][5]