Core Insights - The company reported a revenue of 3.066 billion yuan in 2024, a year-on-year decrease of 3.43%, and a net profit attributable to shareholders of 360 million yuan, which was below expectations and represented a year-on-year decrease of 11.88% [1] - In Q1 2025, the company generated revenue of 702 million yuan, down 2.32% year-on-year, with a net profit of 44 million yuan, also below expectations and down 55.83% year-on-year [1] - The company is expected to benefit from the increasing penetration of smart gas meters in the long term, maintaining an "overweight" rating despite short-term performance pressures [1] Revenue Breakdown - The company's smart residential gas terminal and system business revenue was 1.732 billion yuan in 2024, a decrease of 7.08% year-on-year, primarily due to the impact of order delivery schedules [1] - The smart industrial gas terminal and system business revenue was 702 million yuan, showing a robust growth of 6.62% year-on-year [1] - The smart water terminal and system business revenue was 251 million yuan, down 9.92% year-on-year, while the smart public utility management system and other businesses generated 380 million yuan, an increase of 1.89% year-on-year [1] Profitability and Cost Management - The company's overall gross margin for 2024 was 40%, a decline of 3 percentage points year-on-year, while Q1 2025 gross margin was 35%, down 6 percentage points year-on-year, attributed to changes in revenue structure [2] - The company maintained stable cost control, with sales, management, and R&D expense ratios for 2024 at 16.81%, 4.69%, and 7.30%, respectively, showing slight changes year-on-year [2] Future Outlook - The company is focusing on expanding into new business areas, including ultrasonic products and laser alarms, while increasing strategic resource investment in overseas and process measurement businesses [2] - The company is positioned to benefit from AI opportunities, leveraging a dual-driven model of hardware breakthroughs and AI empowerment [2] Rating and Forecast - The company has adjusted its revenue and gross margin forecasts for 2025-2026 due to order delivery impacts and gross margin fluctuations, with net profit estimates for 2025, 2026, and 2027 at 410 million, 458 million, and 508 million yuan, respectively [3] - The target price has been adjusted to 16.66 yuan, maintaining an "overweight" rating [3]