Investment Rating - The investment rating for Focus Technology is maintained as BUY with a target price of RMB 51.77, indicating a potential upside of 24% from the closing price of RMB 41.82 as of May 9, 2025 [1][8]. Core Insights - Focus Technology reported a significant year-on-year increase in 1Q25 revenue and net profit, with revenue reaching RMB 441 million, attributable net profit at RMB 112 million, and recurring net profit at RMB 109 million, reflecting growth rates of 15.40%, 45.94%, and 49.37% respectively [1]. - The company's organizational restructuring and optimized traffic strategies have begun to show positive results, contributing to improved performance and revenue growth [2]. - The AI Mike membership has surpassed 11,000, indicating a strong uptake of AI services, which enhances the competitiveness of SMEs in foreign trade [3]. - The gross profit margin improved to 80.49%, with reductions in expense ratios across sales, administrative, and R&D costs, suggesting operational efficiency [4]. - Despite a robust increase in net profit, the company remains cautious about external factors such as China-US tariffs, maintaining its net profit forecasts for 2025, 2026, and 2027 at RMB 550 million, RMB 650 million, and RMB 750 million respectively [5]. Financial Performance - In 1Q25, the company achieved a gross profit margin of 80.49%, up 1.46 percentage points year-on-year, while the sales, administrative, and R&D expense ratios decreased, indicating improved operational leverage [4]. - The revenue forecast for the upcoming years shows a steady growth trajectory, with expected revenues of RMB 1,918 million in 2025, RMB 2,167 million in 2026, and RMB 2,431 million in 2027, reflecting growth rates of 14.90%, 13.03%, and 12.15% respectively [12]. - The net profit is projected to grow from RMB 547.08 million in 2025 to RMB 749.50 million in 2027, with corresponding growth rates of 21.25% and 15.30% [12].