Equity Research: Hengdian Group DMEGC Magnetics Co., Ltd. (002056.SZ)

Date: March 28, 2025
Sector: New Energy & Power Equipment / Advanced Materials
Analyst: Yao Yao (S1130512080001), Zhang Jiawen (S1130523090006)
Current Price: CNY 21.43
Rating: BUY
Target Price Implied Upside: Supported by robust earnings growth trajectory and valuation re-rating potential.

Executive Summary

Resilient Performance Amidst Macro Headwinds; Structural Optimization Drives Long-Term Value

Hengdian Group DMEGC Magnetics Co., Ltd. ("DMEGC" or the "Company") released its full-year 2025 financial results on March 27, 2025. The Company reported total revenue of CNY 22.59 billion, representing a year-over-year (YoY) increase of 21.7%. Net profit attributable to shareholders of the parent company amounted to CNY 1.85 billion, a modest YoY increase of 1.3%. While the top-line growth demonstrates strong market expansion, the bottom-line performance was impacted by one-off asset impairment charges and headwinds in the photovoltaic (PV) sector during the fourth quarter.

Our analysis highlights three core pillars of DMEGC’s investment thesis:
1. Magnetic Materials Leadership & Structural Upgrade: The Company has successfully capitalized on high-growth downstream applications, particularly in AI servers and new energy vehicles (NEVs). Through product mix optimization, DMEGC achieved a gross margin expansion in its magnetic materials segment to 28.14% (+0.82 percentage points YoY), reinforcing its status as a global leader with enhanced pricing power.
2. Photovoltaic Resilience via Differentiation: Despite intense industry-wide pressure and adverse overseas trade policy shifts affecting Q4 profitability, DMEGC’s PV division maintained profitability throughout 2025. By adhering to a differentiated product strategy and optimizing its global capacity layout, the Company shipped 24.9 GW of modules (+45% YoY) and achieved a respectable gross margin of 15.25%, demonstrating superior operational resilience compared to peers.
3. Lithium Battery Expansion in Niche Markets: The lithium battery segment continues to gain market share in the small-power application space (e-bikes, smart home, power tools). Revenue grew by 12.7% to CNY 2.72 billion, with gross margins improving significantly by 2.7 percentage points to 15.4% due to stringent cost controls and efficiency gains. Technological readiness for all-tab battery products positions the Company for future capacity expansion.

We have adjusted our earnings forecasts for 2026-2027 to CNY 1.9 billion and CNY 2.4 billion, respectively, and introduced a 2028 forecast of CNY 3.0 billion. At the current share price of CNY 21.43, the stock trades at approximately 18x, 14x, and 12x P/E for 2026, 2027, and 2028, respectively. Given the steady improvement in profitability across all three business segments and the Company’s ability to navigate cyclical downturns, we maintain our BUY rating. We believe the market is underappreciating the quality of earnings derived from structural upgrades in magnetic materials and the sustainable competitive advantage in the PV niche market.

Key Takeaways

1. Financial Performance Overview: Top-Line Strength vs. Bottom-Line Pressure

The fiscal year 2025 was characterized by robust revenue growth driven by volume expansion across all major business units, offset by margin compression in the PV sector during the latter half of the year and significant non-recurring impairment charges.

1.1 Full-Year 2025 Results

• Revenue: CNY 22.59 billion (+21.7% YoY). This growth outpaces the broader industry average, indicating successful market share acquisition.
• Net Profit (Attributable): CNY 1.85 billion (+1.3% YoY). The disparity between revenue growth and profit growth is primarily attributed to:
  • Asset impairment losses totaling CNY 299 million.
  • Margin pressure in the PV segment due to global trade dynamics.
• Gross Profit: CNY 4.02 billion. The overall gross margin stood at 17.8%, reflecting the mixed performance of high-margin magnetic materials and lower-margin, volume-driven PV and lithium businesses.

1.2 Fourth Quarter 2025 Analysis

Q4 results highlight the immediate impact of external macro factors, particularly in the PV sector.
* Q4 Revenue: CNY 5.03 billion (+1.0% YoY, -10.7% QoQ).
* Q4 Net Profit: CNY 399 million (-55.7% YoY, -7.8% QoQ).
* Key Driver of Decline: The sharp decline in Q4 profitability was predominantly driven by changes in overseas trade policies affecting the photovoltaic business. This underscores the sensitivity of the PV segment to geopolitical and regulatory shifts, although the annual profitability remains intact.

1.3 Impact of Asset Impairments

In line with prudent accounting principles, the Company recognized a total of CNY 299 million in asset impairment and disposal losses in 2025. A breakdown of these charges is provided below:

Analyst Note: While the impairment charges weigh on the reported net income, they represent a "kitchen-sinking" event that cleans up the balance sheet for future periods. The fixed asset impairments suggest an active strategy of upgrading capacity to more efficient technologies, which should support long-term margin expansion.

2. Business Segment Analysis: Deep Dive into Drivers

DMEGC operates a diversified portfolio comprising Magnetic Materials, Photovoltaic Products, and Lithium Batteries. Each segment exhibits distinct growth drivers and risk profiles.

2.1 Magnetic Materials & Devices: The Profit Anchor

The magnetic materials segment remains the cornerstone of DMEGC’s profitability and competitive moat. In 2025, this segment demonstrated not only volume growth but, more importantly, qualitative improvement through product mix optimization.

• Financial Metrics:
  • Revenue: ~CNY 5.0 billion (+9.2% YoY).
  • Shipment Volume: 218,000 tons.
  • Gross Margin: 28.14% (+0.82 ppt YoY).
• Strategic Drivers:
  1. High-Growth Downstream Exposure: The Company successfully pivoted its sales structure towards high-value-added applications. Specifically, shipments to AI Servers and New Energy Vehicles (NEVs) saw rapid growth. These sectors demand high-performance soft magnetic composites and inductors, which command higher prices and margins compared to traditional consumer electronics applications.
  2. Product Mix Optimization: The doubling of shipments for copper chip inductors and other advanced devices indicates a successful transition from low-end ferrite cores to integrated passive devices. This structural shift directly contributed to the increase in average selling price (ASP) per ton and the expansion of gross margins.
  3. Global Capacity Layout: DMEGC is accelerating the establishment of overseas manufacturing bases for both magnetic materials and devices. This globalization strategy serves two purposes:
     • Supply Chain Resilience: Mitigating risks associated with trade barriers and tariffs.
     • Customer Proximity: Enhancing service capabilities for global Tier-1 automotive and electronics clients, thereby strengthening stickiness and competitive advantage.

Investment Implication: The magnetic materials business is transitioning from a cyclical commodity play to a technology-driven growth engine. The sustained margin expansion despite raw material cost pressures validates the Company’s pricing power and R&D efficacy. We expect this segment to continue delivering stable, high-quality earnings, acting as a buffer against volatility in the renewable energy sectors.

2.2 Photovoltaic (PV) Products: Resilience Through Differentiation

The global PV industry in 2025 faced severe overcapacity, plummeting module prices, and intensifying competition ("involution"). However, DMEGC’s PV division defied the industry trend of widespread losses, maintaining profitability through a disciplined, differentiated strategy.

• Financial Metrics:
  • Revenue: CNY 14.3 billion.
  • Shipment Volume: 24.9 GW (+45% YoY). This growth rate significantly exceeds the global industry average, indicating aggressive market share gains.
  • Gross Margin: 15.25%. In an environment where many peers reported negative or single-digit margins, double-digit profitability is a testament to operational excellence.
• Strategic Drivers:
  1. Differentiated Product Strategy: Rather than competing solely on price in the utility-scale standard module market, DMEGC focuses on high-efficiency, differentiated products. This includes specialized modules for distributed generation and specific geographic markets where performance and reliability are prioritized over lowest initial cost.
  2. Optimized Market Mix: The Company increased shipments to "high-quality markets" (likely Europe, Japan, and other regions with higher willingness to pay and stricter quality standards). This geographic diversification reduces reliance on any single market and protects margins.
  3. Global Capacity Deployment: By leveraging its overseas production capabilities, DMEGC can better navigate trade barriers (such as anti-dumping duties or local content requirements). This flexibility allows the Company to capture premiums in protected markets while maintaining cost competitiveness.
  4. Operational Resilience: The ability to remain profitable in Q4, despite the noted impact of trade policy changes, highlights strong cost control and supply chain management. The Q4 profit dip was a result of external policy shocks rather than internal operational failures.

Investment Implication: The PV segment is no longer just a volume driver but a proof-of-concept for DMEGC’s strategic agility. While the sector remains cyclical and subject to geopolitical risks, DMEGC’s differentiated approach provides a defensive moat. We anticipate that as industry consolidation proceeds and weaker players exit, DMEGC’s market position will strengthen further, potentially leading to margin recovery in 2026-2027 as supply-demand balances improve.

2.3 Lithium Batteries: Niche Market Dominance & Efficiency Gains

DMEGC’s lithium battery business focuses on the "small power" segment, avoiding direct confrontation with giants in the EV动力电池 (power battery) market. This niche focus has allowed for steady growth and improving profitability.

• Financial Metrics:
  • Revenue: CNY 2.72 billion (+12.7% YoY).
  • Shipment Volume: 622 million units (+17.1% YoY).
  • Gross Margin: 15.4% (+2.7 ppt YoY).
• Strategic Drivers:
  1. Market Expansion: Building on its stronghold in electric two-wheelers (e-bikes/scooters) and smart home devices, the Company has successfully penetrated the power tools market. This diversification within the small-power segment reduces customer concentration risk and opens new revenue streams.
  2. Cost Leadership: The 2.7 percentage point improvement in gross margin is primarily driven by:
     • Production Efficiency: Automation and process optimization have reduced unit manufacturing costs.
     • Strict Cost Control: Rigorous management of raw material procurement and operational expenses.
  3. Technological Advancement: The Company has completed technical reserves and established pilot lines for all-tab (tabless) battery products. All-tab technology offers lower internal resistance, higher power density, and better thermal management, which are critical for high-end power tools and emerging applications. This positions DMEGC to capture higher-value segments in the future.
  4. Product Matrix Enrichment: Continuous expansion of the product portfolio ensures that DMEGC can meet diverse customer specifications, enhancing its value proposition as a one-stop solution provider for small-power applications.

Investment Implication: The lithium battery segment is evolving from a growth-at-all-costs phase to a profitability-focused phase. The margin expansion trend is sustainable given the Company’s focus on efficiency and higher-value products like all-tab cells. As the market for electric tools and smart devices continues to grow globally, this segment offers a stable, compounding growth trajectory with improving returns on capital.

3. Financial Health & Cash Flow Analysis

A review of DMEGC’s balance sheet and cash flow statements reveals a financially robust company with strong liquidity and manageable leverage, providing ample room for future capital expenditure and dividend payments.

3.1 Balance Sheet Strength

• Asset Structure: Total assets reached CNY 27.43 billion in 2025. Current assets constitute 71.3% of total assets, indicating high liquidity.
• Cash Position: Monetary funds stood at CNY 9.29 billion, a slight increase from CNY 8.98 billion in 2024. This substantial cash reserve provides a significant buffer against industry downturns and funds ongoing R&D and capacity expansion without excessive reliance on external debt.
• Liabilities: Total liabilities were CNY 16.37 billion. The asset-liability ratio was 59.68%, which is moderate for a manufacturing firm with heavy capex requirements. Notably, short-term borrowings were managed effectively at CNY 1.68 billion, while long-term debt remains negligible (CNY 1 million), suggesting a conservative debt structure focused on short-term working capital needs.
• Equity: Shareholders' equity increased to CNY 10.63 billion, supporting a solid book value per share of CNY 6.53.

3.2 Cash Flow Dynamics

• Operating Cash Flow (OCF): Net cash flow from operating activities was CNY 3.26 billion in 2025. While this represents a decrease from CNY 3.52 billion in 2024, it remains robust and comfortably covers capital expenditures. The OCF-to-Net Profit ratio is healthy, indicating high quality of earnings.
• Investing Cash Flow: Net cash flow from investing activities was -CNY 3.38 billion. This outflow is primarily driven by capital expenditures (CapEx) of CNY 1.39 billion and other investment activities. The significant CapEx reflects the Company’s commitment to expanding overseas capacity (magnetic materials/PV) and upgrading technology (lithium all-tab lines).
• Financing Cash Flow: Net cash flow from financing activities was -CNY 939 million, mainly due to dividend payments and debt repayments. The negative financing cash flow indicates that the Company is returning capital to shareholders and deleveraging, rather than relying on continuous equity or debt issuance to fund operations.

3.3 Working Capital Management

• Inventory: Inventory levels rose to CNY 5.87 billion (from CNY 3.75 billion in 2024). The inventory turnover days increased to 94.6 days (from 69.9 days). This buildup may reflect strategic stockpiling ahead of potential trade disruptions or increased production volumes for the growing PV and lithium segments. Management will need to monitor this closely to avoid further write-downs.
• Receivables: Accounts receivable increased to CNY 3.87 billion, with turnover days improving slightly to 53.9 days (from 58.0 days). This indicates efficient collection processes despite higher sales volumes.
• Payables: Accounts payable stood at CNY 11.84 billion, with turnover days at 121.6 days. The Company effectively utilizes supplier credit to finance its working capital, contributing to positive operating cash flow.

4. Earnings Forecast & Valuation

Based on the 2025 annual results and our assessment of the three business segments, we have updated our financial model for the next three years.

4.1 Key Assumptions

1. Magnetic Materials: We assume a steady revenue growth of ~8-10% annually, driven by continued penetration in AI and NEV sectors. Gross margins are expected to stabilize around 28-29% as product mix improvements offset any raw material inflation.
2. Photovoltaic: Revenue growth is projected to moderate to ~10% as the base effect diminishes and the industry consolidates. However, we anticipate gradual margin recovery from 15.25% towards 16-17% as supply-demand dynamics normalize and high-efficiency product premiums persist.
3. Lithium Batteries: Revenue growth of ~12-15% is assumed, supported by market share gains in power tools and new applications. Gross margins are expected to further improve to 16-17% as all-tab products scale up and efficiency gains continue.
4. Impairments: We assume normalized, lower levels of asset impairments in future years (CNY 75 million in 2026, declining thereafter) as the 2025 cleanup completes.
5. Tax Rate: An effective tax rate of ~17% is applied, consistent with historical averages and high-tech enterprise benefits.

4.2 Profit & Loss Forecast (2026E - 2028E)

Note: The dip in projected Gross Margin and EBIT for 2026E reflects a conservative assumption regarding continued PV price pressure before a anticipated recovery in 2027-2028. However, net profit growth accelerates due to operating leverage and reduced impairment charges.

4.3 Valuation Analysis

At the current market price of CNY 21.43, DMEGC’s valuation metrics are as follows:

• P/E Multiple Compression: The forward P/E ratio declines significantly from 18.3x in 2026 to 11.7x in 2028, reflecting the anticipated acceleration in earnings growth. This suggests that the stock is reasonably valued today, offering an attractive entry point for long-term investors who believe in the 2027-2028 earnings inflection.
• PEG Ratio: Considering the compound annual growth rate (CAGR) of net profit from 2025 to 2028 is approximately 17%, the 2026 PEG ratio is roughly 1.0x, which is fair for a high-quality manufacturing leader with diversified revenue streams.
• ROE Trajectory: Return on Equity is projected to rebound from 16.46% in 2026 to 20.93% in 2028. This improvement is driven by higher net margins and efficient asset utilization, confirming the effectiveness of the Company’s strategic initiatives.
• Dividend Yield: With a projected dividend per share of CNY 0.586 in 2026, the dividend yield at current prices is approximately 2.7%, providing a decent income cushion alongside capital appreciation potential.

4.4 Peer Comparison (Conceptual)

While specific peer data is not provided in the source, generally, DMEGC trades at a premium to pure-play PV manufacturers due to its diversified earnings base (Magnetics + Lithium) and superior profitability metrics. Compared to pure magnetic material peers, DMEGC offers greater scale and exposure to high-growth renewable energy themes. Its valuation is justified by its unique "Triple-Engine" growth model which mitigates sector-specific cyclicality.

Risks / Headwinds

Investors should be aware of the following key risks that could impact DMEGC’s financial performance and stock price:

1. Photovoltaic Industry Intensification ("Involution")

• Risk Description: The global PV industry is currently experiencing severe overcapacity, leading to aggressive price wars. If this "involution" persists longer than expected, module prices could fall below cash costs for extended periods, squeezing margins further.
• Impact: Could lead to lower-than-expected gross margins in the PV segment, potentially eroding the profitability advantage DMEGC currently holds.
• Mitigation: DMEGC’s differentiation strategy and overseas capacity help mitigate this, but systemic industry downturns are difficult to completely escape.

2. Geopolitical and Trade Policy Uncertainty

• Risk Description: As evidenced by the Q4 2025 results, changes in overseas trade policies (tariffs, anti-dumping investigations, local content requirements) can have an immediate and significant impact on profitability. Major markets like the US, EU, and India are increasingly protectionist regarding solar and battery supplies.
• Impact: Potential loss of access to high-margin markets, increased compliance costs, or forced relocation of supply chains.
• Mitigation: The Company is actively expanding overseas manufacturing bases to localize production and bypass trade barriers. However, execution risks and higher operational costs abroad remain.

3. Intense Competition in the Lithium Battery Sector

• Risk Description: The small-power lithium battery market is becoming increasingly crowded, with large players expanding into this niche and new entrants emerging. Price competition could intensify.
• Impact: Pressure on ASPs and gross margins in the lithium segment, potentially reversing the recent margin improvement trend.
• Mitigation: DMEGC’s focus on cost leadership, efficiency, and technological innovation (all-tab) aims to maintain its competitive edge. Strong customer relationships in e-bikes and power tools provide some stickiness.

4. Demand Volatility in Downstream Applications

• Risk Description: Demand for AI servers, NEVs, e-bikes, and consumer electronics is subject to macroeconomic cycles. A global economic slowdown could reduce demand for these end-products.
• Impact: Lower shipment volumes across magnetic and lithium segments, leading to underutilization of capacity and fixed cost absorption issues.
• Mitigation: Diversification across multiple downstream sectors helps smooth out demand volatility. For instance, weakness in consumer electronics might be offset by strength in NEVs or AI infrastructure.

5. Raw Material Price Fluctuations

• Risk Description: The cost of key raw materials such as lithium carbonate, cobalt, nickel (for batteries), and iron oxide/strontium carbonate (for magnetics) can be volatile.
• Impact: Unanticipated spikes in raw material costs could compress gross margins if the Company cannot pass these costs onto customers quickly enough.
• Mitigation: Long-term supply contracts and strategic stockpiling are used to manage price risks. However, hedging is not always perfect.

6. Asset Impairment Risks

• Risk Description: Rapid technological changes in PV and lithium batteries may render existing production equipment obsolete faster than anticipated.
• Impact: Potential for further asset impairment charges in future periods, impacting net profit.
• Mitigation: The significant impairments taken in 2025 may have cleared much of the obsolete asset base, reducing the likelihood of similar large charges in the near term.

Rating / Sector Outlook

Sector Outlook: Cautiously Optimistic with Structural Alpha

• Magnetic Materials: Positive. The sector is benefiting from secular trends in electrification and digitalization. AI infrastructure and NEVs are creating incremental demand for high-performance soft magnetics. The barrier to entry for high-end products is rising, favoring established leaders like DMEGC.
• Photovoltaics: Neutral to Positive (Long-term). The short-term outlook remains challenging due to overcapacity and trade friction. However, the long-term demand for renewable energy is undeniable. Industry consolidation is inevitable, and survivors with differentiated products and global footprints (like DMEGC) will emerge stronger. We expect the sector to bottom out in 2025-2026, with a recovery in profitability starting in 2027.
• Lithium Batteries (Small Power): Positive. The transition from lead-acid to lithium in two-wheelers and power tools is still ongoing globally. Additionally, the growth of smart home devices provides a steady demand base. The segment is less cyclical than EV power batteries and offers better stability.

Investment Rating: BUY

We maintain our BUY rating on DMEGC (002056.SZ).

Rationale:
1. Undervalued Growth: The current valuation (18x 2026E P/E) does not fully reflect the quality of earnings from the magnetic materials business nor the resilience of the PV segment. As earnings accelerate in 2027-2028, the multiple is likely to expand or remain stable, driving share price appreciation.
2. Strategic Clarity: Management has demonstrated a clear and effective strategy: differentiate in PV, upgrade in Magnetics, and optimize efficiency in Lithium. This tripartite approach reduces single-sector risk.
3. Financial Robustness: Strong cash flow and a healthy balance sheet allow the Company to invest in counter-cyclical opportunities (e.g., overseas expansion) while maintaining dividends.
4. Catalysts:
* Recovery in PV industry profitability in 2027.
* Successful mass production and adoption of all-tab lithium batteries.
* Continued margin expansion in magnetic materials due to AI/NEV mix.
* Potential for increased dividend payouts as cash flow stabilizes.

Target Price Context:
While a specific target price is not explicitly calculated in the source text beyond the P/E multiples, the implied upside from the current price of CNY 21.43 to a 2027E P/E of 14.5x (with EPS of 1.479) suggests a fair value of approximately CNY 21.45 based strictly on 2027 earnings. However, applying a higher multiple (e.g., 18-20x) to the 2028E EPS of 1.838, reflective of a mature, high-ROE industrial leader, implies a potential future value of CNY 33.00 - 36.70. Therefore, the long-term upside potential is significant, warranting a Buy rating for investors with a 12-24 month horizon.

Investment View

Core Investment Logic

DMEGC represents a compelling investment opportunity in the Chinese advanced manufacturing sector, distinguished by its diversified business model, operational resilience, and strategic foresight. Unlike pure-play companies exposed to the extreme cyclicality of either solar or batteries, DMEGC offers a balanced exposure to three complementary growth engines.

1. The "Steady Eddie" Anchor (Magnetics): The magnetic materials business provides a stable, high-margin foundation. Its successful pivot towards AI and NEV applications transforms it from a traditional cyclical component supplier into a beneficiary of mega-trends in computing and electrification. The consistent margin expansion proves that DMEGC can innovate its way to higher profitability.
2. The "Resilient Grower" (PV): The PV segment, while facing headwinds, has proven its ability to generate profits when peers are losing money. This demonstrates a sustainable competitive advantage rooted in product differentiation and global operational flexibility. As the industry clears excess capacity, DMEGC is well-positioned to capture disproportionate market share and margin recovery.
3. The "Efficiency Improver" (Lithium): The lithium battery segment is executing a classic turnaround story, moving from market share acquisition to profit maximization. The focus on niche markets and technological upgrades (all-tab) ensures that this segment contributes positively to earnings without requiring massive, risky capex bets in the ultra-competitive EV battery arena.

Why Now?

The timing for investing in DMEGC is favorable for several reasons:
* Bottoming Out of Impairments: The significant asset impairments recorded in 2025 have largely cleaned up the balance sheet, reducing the overhang on future earnings.
* Valuation Comfort: Trading at ~18x forward P/E, the stock is not expensive relative to its growth profile and ROE potential. The market appears to be discounting the PV risks excessively while ignoring the strength of the magnetics and lithium businesses.
* Macro Tailwinds: Global interest rate cuts (anticipated in 2025-2026) could stimulate demand for durable goods (EVs, home improvement/tools), benefiting all three of DMEGC’s segments.
* Policy Support: Continued government support for high-tech manufacturing and green energy in China provides a favorable regulatory environment.

Strategic Recommendations for Investors

• Long-Term Hold: Investors should view DMEGC as a long-term hold, benefiting from the secular growth of electrification and digital infrastructure.
• Monitor Quarterly Margins: Key metrics to watch include the gross margin trends in the PV and Lithium segments. Any sign of sustained margin recovery in PV will be a major positive catalyst.
• Track Overseas Expansion: Progress on overseas manufacturing facilities (particularly in Mexico, Vietnam, or Europe) will be crucial for mitigating trade risks and sustaining PV profitability.
• Dividend Reinvestment: Given the stable cash flow and reasonable yield, reinvesting dividends can enhance total returns over time.

Conclusion

Hengdian Group DMEGC Magnetics Co., Ltd. has demonstrated remarkable resilience and strategic adaptability in a challenging macroeconomic environment. Its 2025 results, while showing modest net profit growth, reveal underlying strengths in market share gains, product mix optimization, and cost control. The Company’s ability to maintain profitability in the PV sector amidst industry-wide losses is a standout achievement that underscores its competitive moat.

With a clean balance sheet, strong cash flows, and a clear path to earnings acceleration in 2027-2028, DMEGC is well-equipped to deliver superior shareholder returns. We believe the current valuation offers an attractive entry point for institutional investors seeking exposure to high-quality Chinese manufacturing with diversified growth drivers. We reiterate our BUY rating.

Appendix: Detailed Financial Data & Tables

1. Historical & Forecasted Income Statement Highlights (CNY Million)

2. Balance Sheet Highlights (CNY Million)

3. Cash Flow Statement Highlights (CNY Million)

4. Key Financial Ratios

5. Analyst Consensus & Rating History

Score Interpretation: 1.00 = Buy; 1.01-2.00 = Overweight; 2.01-3.00 = Hold; 3.01-4.00 = Underweight/Sell.

The consistent "Buy" ratings from analysts over the past six months reflect strong confidence in the Company’s long-term prospects despite short-term volatility.

Disclaimer

This report is prepared by Guojin Securities Co., Ltd. ("Guojin Securities") for institutional investors and professional clients only. It is based on information believed to be reliable, but Guojin Securities makes no representation or warranty, express or implied, regarding the accuracy, completeness, or timeliness of the information contained herein.

The opinions expressed in this report reflect the personal views of the analysts at the time of publication and are subject to change without notice. This report does not constitute an offer to sell or a solicitation of an offer to buy any securities. Past performance is not indicative of future results.

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