Performance Summary - In Q1 2025, the company achieved revenue of 3.23 billion yuan, a year-on-year increase of 21.4% [1] - The net profit attributable to the parent company was 450 million yuan, up 22.9% year-on-year [1] - The net profit excluding non-recurring items was 440 million yuan, reflecting a year-on-year growth of 28.1%, meeting expectations [1] Operational Analysis - Domestic investment in the power grid reached a record high, with the State Grid completing fixed asset investments exceeding 90 billion yuan, a nearly 30% year-on-year increase [2] - The first batch of bidding for power transmission and transformation equipment by the State Grid amounted to 15.2 billion yuan, up 23% year-on-year, marking a four-year high [2] - The company secured contracts worth 1.05 billion yuan, including an unexpected 350 million yuan for 750kV GIS, enhancing its market share [2] - Transformer exports in Q1 2025 reached 1.82 billion USD, a 39% year-on-year increase, indicating sustained high growth [2] - The company made breakthroughs in markets such as the UK, Italy, Saudi Arabia, and Kuwait, benefiting from overseas demand for power equipment [2] Order Backlog and Targets - As of Q1 2025, the company's contract liabilities reached 2.84 billion yuan, a 19.91% increase from the beginning of the year, indicating a robust order backlog [3] - The company aims to secure new orders of 26.8 billion yuan (excluding tax) in 2025, a year-on-year increase of 25% [3] - The revenue target for 2025 is set at 18.5 billion yuan, reflecting a 20% year-on-year growth expectation [3] Profitability and Cost Control - The company's overall gross margin in Q1 2025 was 30.3%, a decrease of 0.4 percentage points year-on-year, while the net profit margin was 14.4%, an increase of 0.8 percentage points [4] - The expense ratios for sales, management, and R&D were 5.0%, 2.8%, and 7.9% respectively, showing stable management of expenses [4] Profit Forecast and Valuation - The company has a clear development strategy and business plan, with expectations for continued revenue growth in various product lines [5] - Projected net profits for 2025-2027 are 2.6 billion, 3.23 billion, and 3.97 billion yuan, representing year-on-year growth rates of 27%, 24%, and 23% respectively [5] - The current stock price corresponds to a PE valuation of 22, 18, and 14 times for the years 2025, 2026, and 2027, maintaining a "buy" rating [5]

Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% in the next 6-12 months [6][12]. Core Views - The company reported a revenue of 3.23 billion RMB in Q1 2025, a year-on-year increase of 21.4%, and a net profit of 450 million RMB, up 22.9% year-on-year, aligning with expectations [2]. - Domestic investment in the power grid reached a historical high, with the State Grid completing fixed asset investments exceeding 90 billion RMB, a nearly 30% year-on-year increase [3]. - The company has a robust order backlog, with contract liabilities reaching 2.84 billion RMB, a 19.91% increase from the beginning of the year, and aims for new orders of 26.8 billion RMB in 2025, a 25% year-on-year increase [4]. - The company's gross margin stood at 30.3%, with a net margin of 14.4%, indicating stable profitability and effective cost control [5]. - The company is expected to achieve net profits of 2.6 billion RMB, 3.2 billion RMB, and 3.97 billion RMB for the years 2025, 2026, and 2027 respectively, with growth rates of 27%, 24%, and 23% [6]. Summary by Sections Performance Review - In Q1 2025, the company achieved a revenue of 3.23 billion RMB, a year-on-year increase of 21.4%, and a net profit of 450 million RMB, up 22.9% [2]. Operational Analysis - Domestic power grid investment reached over 90 billion RMB in Q1 2025, a nearly 30% increase year-on-year, with the company winning contracts worth 1.05 billion RMB [3]. - Transformer exports amounted to 1.82 billion USD in Q1 2025, a 39% year-on-year increase, benefiting from strong demand in international markets [3]. Order Backlog and Targets - The company reported contract liabilities of 2.84 billion RMB, a 19.91% increase from the start of the year, with a target of 26.8 billion RMB in new orders for 2025 [4]. Profitability and Cost Control - The company maintained a gross margin of 30.3% and a net margin of 14.4%, with stable expense ratios for sales, management, and R&D [5]. Profit Forecast and Valuation - The company is projected to achieve net profits of 2.6 billion RMB, 3.2 billion RMB, and 3.97 billion RMB for 2025, 2026, and 2027, with corresponding PE ratios of 22, 18, and 14 [6].