Investment Rating - The report maintains an "Outperform" rating for the company, with a target price raised to RMB 17.76 [1][9]. Core Insights - The company faced performance pressure in 2024 due to the divestment of non-core businesses, but is expected to see significant growth in 2025 driven by its dual development strategy in energy digitalization and energy internet, along with enhanced ecosystem partnerships and AI-enabled applications [1][9]. - In 2024, the company reported total revenue of RMB 4.48 billion, a decrease of 5.24% year-on-year, and a net loss attributable to shareholders of RMB 250 million, primarily due to the impact of divesting loss-making businesses [9][10]. - The first quarter of 2025 showed promising results with revenue of RMB 667 million, a slight decline of 0.12% year-on-year, but a net profit of RMB 3 million, indicating a turnaround from the previous year's losses [9][10]. Financial Summary - The company’s projected financials for 2025-2027 include revenues of RMB 5.17 billion, RMB 6.08 billion, and RMB 6.93 billion respectively, with expected net profits of RMB 480 million, RMB 604 million, and RMB 727 million [3][5]. - The earnings per share (EPS) are projected to be RMB 0.44, RMB 0.56, and RMB 0.67 for 2025, 2026, and 2027 respectively, with a price-to-earnings (PE) ratio of 40 assigned for 2025 [3][9]. - The company’s gross profit margin is expected to improve from 41% in 2024 to 43% by 2027, reflecting operational efficiency [6]. Strategic Focus - The company is focusing on energy digitalization and energy internet development, leveraging over 27 years of experience in the power energy sector, and is collaborating with Ant Group to enhance its ecosystem [10][11]. - The establishment of an AI research institute in 2023 marks a strategic shift towards AI-driven operations, with applications in power market trading forecasts and energy intelligent applications [11][10].

Core Viewpoint - The company is expected to face performance pressure in 2024 due to the divestiture of non-core businesses, but is projected to experience long-term growth driven by dual development in energy digitalization and energy internet, along with strengthened ecological cooperation and AI-enabled new applications [1] Investment Highlights - The investment recommendation is maintained at "Buy" with a target price raised to 17.76 yuan (+2.39). The expected EPS for 2025-2027 is 0.44 (-0.20), 0.56 (-0.19), and 0.67 yuan respectively. The average PE for comparable companies in 2025 is 29.09X. Given the company's focus on dual development strategy and accelerated performance growth through AI-enabled platform electricity trading, a 40 times PE is assigned for 2025, corresponding to the target price of 17.76 yuan, maintaining the "Buy" rating [2] - In 2024, the company is expected to face performance pressure with total revenue of 4.479 billion yuan, a year-on-year decrease of 5.24%. The net profit attributable to shareholders is projected to be -250 million yuan, compared to 604 million yuan in the same period of 2023, primarily due to the divestiture and restructuring losses of non-core businesses, leading to goodwill and inventory impairments and one-time financial impacts. In Q1 2025, the company achieved revenue of 667 million yuan, a slight decrease of 0.12% year-on-year, but turned a profit with a net profit of 3 million yuan, an increase of 22 million yuan year-on-year, with a gross margin of 48.39%, up 3.18 percentage points [2][3] Strategic Focus - The company continues to focus on dual development in energy digitalization and energy internet, collaborating with Ant Group to build a strong ecosystem. With over 27 years in the electric energy sector, the company is seizing new opportunities from electricity market reform and the construction of new power systems. Since 2013, the company has partnered with Ant Group to develop life payment service scenarios, and by the end of 2024, Ant Group will be the company's second-largest shareholder. Additionally, the company is closely cooperating with Ant Group in digital payment and technology, expanding services in countries like Indonesia and the Philippines [3] - The company is fully embracing the AI era, shifting from customer-driven to AI-driven business. Significant investments are being made in AI research and applications, with the establishment of an AI research institute in 2023 focusing on three main areas: electricity market trading prediction, energy intelligent applications, and energy-specific large models. The company is enhancing its "AI + Energy" strategy, increasing research and practice in AI platform construction, time series prediction models, and AI intelligent applications, thereby improving resource adjustment capabilities and supply-demand matching. Successful AI electricity spot trading has been implemented in provinces like Guangdong and Shandong, and the "New Electric Rabbit" AI charging assistant has been launched to provide intelligent charging services for electric vehicle users [4]

Core Viewpoint - Langxin Group reported a revenue of 4.479 billion yuan for 2024, a year-on-year decrease of 5.24%, and a net profit attributable to shareholders of -250 million yuan, marking a shift from profit to loss [2][5] Business Restructuring - The company has fully optimized and restructured its non-core businesses, including the divestiture of TV set-top boxes, digital cities, digital foreign trade, and industrial internet [3] - The restructuring is expected to have no further impact on the company's performance, allowing it to operate more efficiently starting in 2025 [3] Financial Impact - The strategic focus on core business led to a one-time financial impact of approximately 488 million yuan due to goodwill impairment, inventory impairment, and the capitalization of prior costs [2][5] - This restructuring resulted in the company's first loss since its listing, which may cause short-term market fluctuations but is seen as a necessary step for long-term growth [5] Energy Digitalization - In the energy digitalization sector, the company provided software solutions and digital services to major clients like State Grid and Southern Power Grid, achieving a gross margin of 33.99%, down 6.35% year-on-year [3][4] - The decline in gross margin is attributed to increased costs from expanding into new markets and developing new product lines, including AI and data platforms [4] Energy Internet Growth - The energy internet business generated 1.804 billion yuan in revenue, a year-on-year increase of 17.63, driven by rapid growth in power market transactions and AI applications [4] - The company is focusing on creating operational scenarios for electricity services, such as life payment and virtual power plants [4] AI Strategy - The establishment of an AI research institute in 2023 aims to enhance capabilities in energy market trading predictions and applications of AI in energy systems [6][9] - AI technology is expected to significantly improve operational efficiency and support the transition to a new energy system, addressing challenges in energy structure changes [7] Future Directions - The company plans to accelerate its transformation into an AI-driven technology energy enterprise, enhancing R&D investments in AI and applying it across business innovations [8][9] - Future strategies include transitioning from project-based software services to a platform-based energy operation model, focusing on AI applications in energy resource management [9]