Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Views - In Q1 2025, the company reversed the trend of declining revenue, with government and enterprise business doubling year-on-year, leading to a quarter-on-quarter revenue increase. The company is focusing on growth driven by its second curve business, particularly in computing power and terminal sectors [2][6]. Summary by Sections Financial Performance - In Q1 2025, the company achieved revenue of 32.97 billion yuan, a year-on-year increase of 8% and a quarter-on-quarter increase of 5%. The net profit attributable to shareholders was 2.45 billion yuan, down 11% year-on-year, while the net profit excluding non-recurring items was 1.96 billion yuan, a decrease of 26%. The operating cash flow net amount was 1.85 billion yuan, down 38% year-on-year [6][12]. Business Growth - The company’s government and enterprise business saw a year-on-year doubling, contributing to the revenue growth. The second curve business revenue accounted for over 35% of total revenue, with government business making up over 20%. The company aims to deepen its investment in AI, leveraging opportunities in communication and computing infrastructure [12][12]. Margin and Cost Control - The overall gross margin for Q1 2025 was 34.27%, a decrease of 7.75 percentage points year-on-year, attributed to the rapid growth of low-margin government business. The net profit margin was 7.5%, down 1.6 percentage points year-on-year. The company maintained good cost control, with sales, management, R&D, and financial expense ratios at 7.0%, 2.9%, 18.0%, and -1.0% respectively [12][12]. Future Outlook - The company is expected to continue focusing on its second curve business, particularly in computing power and terminal sectors. Forecasted net profits for 2024-2026 are 8.73 billion yuan, 9.13 billion yuan, and 9.72 billion yuan, with corresponding year-on-year growth rates of 4%, 5%, and 7% [12][12].

Investment Rating - The report maintains a "Recommended" rating for the company [4][7]. Core Insights - The company's revenue for Q1 2025 reached 32.968 billion yuan, a year-on-year increase of 7.8%, while the net profit attributable to shareholders decreased by 10.5% to 2.453 billion yuan [1]. - The second curve business, which includes intelligent computing servers and AI terminals, has accelerated growth, contributing over 35% to total revenue [2]. - The company has successfully transitioned from a fully connected strategy to a "connection + computing power" strategy, showing initial positive results [2]. - The enterprise business has doubled its revenue year-on-year, now accounting for over 20% of total revenue, up from 15% in 2024 [2]. - The consumer business, particularly mobile products, continues to grow, and cloud computer sales are accelerating [2]. - The operator network business faces pressure due to a decrease in capital expenditure from major telecom operators [2]. - The company's gross profit margin has decreased to 34.3%, down 7.8 percentage points year-on-year, primarily due to the rapid growth of lower-margin enterprise business [3]. - The net profit margin is at 7.5%, a decline of 1.6 percentage points year-on-year, but effective cost control has mitigated the impact of declining gross margins [3]. - The company is expanding its intelligent computing and AI terminal businesses, leveraging opportunities from increased investments in computing power by leading internet companies and operators [4]. - Future net profit forecasts for 2025-2027 are 8.6 billion, 8.8 billion, and 9.0 billion yuan, respectively, with corresponding PE ratios of 18, 17, and 17 times [4]. Financial Projections - The company expects total revenue to grow from 121.299 billion yuan in 2024 to 157.226 billion yuan in 2027, with growth rates of -2.4%, 7.3%, 9.4%, and 10.5% respectively [6][10]. - The net profit attributable to shareholders is projected to increase from 8.425 billion yuan in 2024 to 9.031 billion yuan in 2027, with growth rates of -9.7%, 1.8%, 2.6%, and 2.6% respectively [6][10]. - The earnings per share are expected to rise from 1.76 yuan in 2024 to 1.89 yuan in 2027 [6][10].