Core Viewpoint - The company reported a revenue decline in the first three quarters of 2025, but net profit showed growth, indicating a mixed performance amidst rising costs and strategic expansions in new business areas [3][11]. Financial Performance - For Q1-Q3 2025, the company's revenue reached 3.237 billion yuan, a year-on-year decrease of 7.38%, while net profit attributable to shareholders was 287 million yuan, an increase of 7.54%. The net profit excluding non-recurring items was 304 million yuan, up 16.66% year-on-year [3]. - In Q3 2025, revenue was 1.076 billion yuan, with a year-on-year decline of 4.68% and a quarter-on-quarter increase of 2.28%. The net profit for Q3 was 76 million yuan, down 7.90% year-on-year and 13.09% quarter-on-quarter [3]. Profitability Metrics - The net profit margin for Q1-Q3 2025 was 8.86%, an increase of 1.23 percentage points year-on-year, while the gross margin was 25.77%, up 4.35 percentage points year-on-year. In Q3 2025, the net profit margin was 7.09%, down 0.25 percentage points year-on-year and 1.25 percentage points quarter-on-quarter, with a gross margin of 26.28%, up 0.46 percentage points year-on-year and 0.56 percentage points quarter-on-quarter [4]. Expense Analysis - The expense ratio for Q3 2025 was 17.50%, showing an increase of 0.08 percentage points year-on-year and 2.85 percentage points quarter-on-quarter. The breakdown of expenses included sales (3.41%), management (6.51%), R&D (7.68%), and financial expenses, with financial expenses increasing by 14 million yuan quarter-on-quarter due to prior exchange gains [5][6]. Strategic Developments - The company established a wholly-owned subsidiary, Hangyi Technology, in July 2025, focusing on non-automotive liquid cooling pumps for data centers and energy storage, with over 80 major clients and more than 120 ongoing projects [7]. - In July 2025, the company received a project designation for a thermal management integrated module from SAIC Motor, with expected sales revenue exceeding 400 million yuan over the project lifecycle [9]. - In October 2025, the company increased its investment in its wholly-owned subsidiary, Feilong International, by up to 300 million yuan, primarily for investment in Longtai Automotive in Thailand, aiming to expand its global business scale [10]. Profit Forecast and Investment Rating - The company adjusted its net profit forecasts for 2025-2027 to 430 million, 624 million, and 756 million yuan, respectively, reflecting a decrease from previous estimates. The current market capitalization corresponds to a PE ratio of 30, 21, and 17 times for 2025-2027. Despite short-term expense increases, the company maintains a "buy" rating due to ongoing expansion in the liquid cooling sector and significant margin improvements [11].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company's revenue for Q1-Q3 2025 reached 3.237 billion yuan, a year-on-year decrease of 7.38%, while the net profit attributable to shareholders was 287 million yuan, an increase of 7.54% year-on-year. The net profit after deducting non-recurring gains and losses was 304 million yuan, up 16.66% year-on-year [7] - The establishment of a wholly-owned subsidiary, Hangyi Technology, marks further progress in the IDC liquid cooling sector, focusing on non-automotive liquid cooling pump R&D, production, and sales [7] - The company has received a project designation for a thermal management integrated module from SAIC Motor, with expected sales revenue exceeding 400 million yuan over the project lifecycle [7] - The company is increasing its investment in its Thailand factory, which began production in June 2025, aiming to expand its global business scale [7] Financial Summary - Revenue forecast for 2023A is 4.095 billion yuan, with a year-on-year growth of 25.69%. The forecast for 2024A is 4.723 billion yuan, with a growth of 15.34%, and for 2025E is 5.025 billion yuan, with a growth of 6.39% [1] - The net profit attributable to shareholders is forecasted to be 261.77 million yuan for 2023A, with a significant year-on-year increase of 211.14%. The forecast for 2024A is 329.62 million yuan, with a growth of 25.92%, and for 2025E is 430.42 million yuan, with a growth of 30.58% [1] - The latest diluted EPS is projected to be 0.46 yuan for 2023A, increasing to 0.57 yuan for 2024A and 0.75 yuan for 2025E [1] - The company's P/E ratios for 2025-2027 are projected to be 30, 21, and 17 respectively, reflecting a favorable valuation outlook [7]