Core Viewpoint - The company reported a decline in revenue and net profit for 2024, but showed growth in Q1 2025, indicating potential recovery and opportunities for future growth [2][3]. Group 1: Financial Performance - In 2024, the company achieved revenue of 7.315 billion yuan, a year-on-year decrease of 4.67%, and a net profit of 682 million yuan, down 17.60% [2]. - For Q1 2025, the company reported revenue of 1.112 billion yuan, an increase of 9.14% year-on-year, and a net profit of 26 million yuan, up 117.20% [2]. Group 2: Segment Performance - The digital infrastructure segment generated revenue of 3.365 billion yuan in 2024, a year-on-year increase of 1.56%, driven by growth in information technology procurement, although gross margin decreased to 16.55%, down 3.22 percentage points [3]. - The enterprise digital application segment saw revenue decline to 877 million yuan, down 20.20%, despite an increase in gross margin to 28.79%, up 5.82 percentage points [3]. - The power digital application segment achieved revenue of 2.254 billion yuan, a year-on-year increase of 7.45%, with gross margin improving to 21.66%, up 1.12 percentage points [3]. - Revenue from cutting-edge technology innovation and energy innovation services declined significantly, down 33.34% and 18.20%, respectively, totaling 506 million yuan and 312 million yuan [3]. - Overall, the company's gross margin for 2024 was 20.17%, a decrease of 1.39 percentage points [3]. Group 3: Strategic Initiatives - The company is accelerating the acquisition of Yili Technology to optimize its industrial layout, with a signed intention to acquire shares expected to be finalized by August 31, 2025 [4]. - Yili Technology, a subsidiary of the State Grid Information Communication Group, reported revenue of 1.45 billion yuan and a net profit of 102 million yuan for the first nine months of 2024 [4]. - The company is focusing on digital transformation trends, enhancing technological innovation capabilities, and optimizing its industrial layout by concentrating on core competencies and value creation [5].

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company reported a revenue of 7.315 billion yuan in 2024, a decrease of 4.67% year-on-year, with a net profit of 682 million yuan, down 17.60% year-on-year. In Q1 2025, revenue increased by 9.14% year-on-year to 1.112 billion yuan, and net profit surged by 117.20% year-on-year to 26 million yuan [1][2]. - The company is accelerating the acquisition of Yili Technology to optimize its industrial layout, with the acquisition expected to be completed by August 31, 2025. Yili Technology generated 1.45 billion yuan in revenue and 102 million yuan in net profit in the first nine months of 2024 [3]. - The company is focusing on digital transformation trends and enhancing its technological innovation capabilities, targeting major demands in the new power system and various significant projects [3]. Summary by Sections Financial Performance - In 2024, the digital infrastructure segment generated 3.365 billion yuan, up 1.56% year-on-year, while the enterprise digital application segment saw a decline of 20.20% to 877 million yuan. The power digital application segment grew by 7.45% to 2.254 billion yuan [2]. - The overall gross margin for 2024 was 20.17%, a decrease of 1.39 percentage points year-on-year [2]. Profit Forecast and Valuation - The net profit forecasts for 2025 and 2026 have been slightly adjusted to 973 million yuan and 1.168 billion yuan, respectively, with a new forecast for 2027 at 1.345 billion yuan. The corresponding EPS for these years is projected to be 0.81, 0.97, and 1.12 yuan, with P/E ratios of 22, 19, and 16 [4][10]. - The company is expected to benefit from its status as an important subsidiary of the State Grid, which ensures a stable order flow and performance [4]. Market Data - The current share price is 18.09 yuan, with a total market capitalization of 21.732 billion yuan [6].

Core Viewpoint - Shanghai Electric reported significant improvement in Q1 2025 performance, with total revenue increasing by 8.06% and net profit soaring by 145.69% compared to the same period last year [1][2]. Financial Performance - Q1 net profit attributable to shareholders reached 292 million yuan, a year-on-year increase of 145.69% [2]. - Total revenue for the quarter was 22.245 billion yuan, reflecting an 8.06% growth from the previous year [2]. - The adjusted net profit after excluding non-recurring items turned from a loss of 1.2 billion yuan last year to a profit of 205 million yuan [1][2]. Profitability and Cash Flow - Basic earnings per share increased to 0.0188 yuan, up 147.37% year-on-year [4][6]. - Operating cash flow improved, with a net outflow of 3.87 billion yuan, a reduction of approximately 30.7 billion yuan compared to the previous year [1][6]. - Investment income for the quarter was 514 million yuan, a 13% increase year-on-year, with significant contributions from joint ventures [6]. Business Structure and Efficiency - The company’s main business revenue and gross profit increased, enhancing overall performance, particularly in the fields of new energy and intelligent manufacturing [1][5]. - Inventory rose from 3.455 billion yuan to 3.963 billion yuan, indicating increased project advancement and stockpiling [6]. - Accounts receivable remained stable, suggesting effective collection efforts, while the reduction in pledged funds from 26.2 billion yuan to 16.4 billion yuan reflects efforts to optimize asset structure [6]. Asset and Liability Management - As of the end of Q1 2025, total assets stood at 300.474 billion yuan, a slight decrease of 0.67% from the previous year [7]. - Shareholder equity increased by 0.69% to 53.559 billion yuan, indicating a healthy financial structure [7]. - Short-term borrowings slightly increased, but overall liquidity pressure remains due to substantial current liabilities [7]. Industry Position and Strategic Outlook - Shanghai Electric is a leading comprehensive equipment manufacturing group in China, with a focus on energy equipment, industrial equipment, and integrated services [8]. - The company is actively expanding into new energy and high-end equipment manufacturing sectors to address challenges and opportunities arising from energy transition and industrial upgrades [8].