自2024年第四季度以来，GPM持续实现同比改善。

Continuous Yoy Improvement inGPM Since 4Q24 Rating (Maintain):BUYTarget price (RMB):12.54 Annual Results ReviewArchitectural Design & Services Huatai Research 18 May 2025│China (Mainland) AnalystFANG YanheSAC No. S0570517080007SFC No. BPW811fangyanhe@htsc.com+(86) 755 2266 0892 BothEngineeringreleaseditsannualand1Q25results:revenuereachedRMB5.2bn in 2024, up 31.8% yoy, with attributable net profit (NP)/recurring NP atRMB212/204mn, down 0.8/2.5% yoy. Attributable NP missed our prior estimate ofRMB250mn,mainlyduetointensifiedindustrycompetitionandasharper-than-we-expected GPM decline, in our view. Revenue for 4Q24/1Q25came in at RMB1.41/1.04bn,declining by2.8/9.4% yoy, with attributable NP ofRMB53.57/44.20mn,decliningby16.5/20.6%yoy.ThecompanysecuredRMB5.4bnin neworders in 2024,increasingby9.5% yoy,withbacklog atRMB2.9bn. We believe the recent major breakthrough of DeepSeek in China andthe long-term policy tailwind of building a strong manufacturing nation will supportcontinued robust capex in the technology sector. As a leading domestic provider ofintegrated cleanroom system solutions, the company is well-positioned to benefit.Maintain BUY. AnalystHUANG YingSAC No.S0570522030002SFC No. BSH293huangying018854@htsc.com+(86) 21 2897 2228 Key data Industry momentum drives strong electronics revenue growthBysegment,2024revenuefromsemiconductor&pan-semiconductor/new display/lifescience/food&pharmaceuticalhealthwasRMB3.7/0.9/0.3/0.2bn,changingby+29/+112/-29/-16%yoy,withGPMof9/11/11/13%(-1.7/-2.4/-3.1/+4.0pp yoy). Semiconductor sustained rapid growth, supported byimport substitution progress,while new display revenue jumped on acceleratedcapacityexpansionbyleadingplayers.Byproduct,cleanroomsystemintegration/electromechanicalprocesssystems/secondarydistributionrecordedrevenue of RMB2.7/1.4/1.2bn, up 18/18/121% yoy, with GPM at 8.8/9.8/12.9%,down 1.0/3.1/1.0pp yoy. Overall GPM for 2024 declined 1.4pp yoy to 10.0%, butimproved to 9.7/10.3% in 4Q24/1Q25, up 0.4/0.7pp yoy, thanks to enhanced costcontrol initiatives since 4Q24. Source:Wind Administrative expenses increased significantly in 2024Theoverallexpenseratiorose0.4ppyoyto3.2%in 2024,withsales/administrative/R&D/financialexpenseratioschangingby-0.1/+0.4/-0.2/+0.3pp yoy. Administrative expenses rallied 53% yoy, driven byincreased headcount and compensation amid businessexpansion, as well asemployee incentives and non-operating payment considerations, in our view.Impairment losses as a share of revenue declined 0.4pp yoy to 1.17%. AttributableNPM was 4.1% in 2024,declining by1.3pp yoy. For 1Q25, the expense ratio rose1.9ppyoyto4.5%,withattributableNPM at4.3%,decliningby0.6ppyoy.Operatingcashflowin2024wasRMB220mn,broadlyflatyoy,withcashreceived-to-operating revenue ratio/cash paid-to-operating cost ratioat 90/86%,increasing by3.1/3.7pp yoy. Earnings forecasts and valuationConsideringadelayindownstream electronicscapexvsourpreviousexpectations, we lower our new order and revenue forecasts and revise ourattributable NP estimates for 2025/2026/2027 to RMB236/265/282mn (previous:RMB297/343/–mn, revised by-20%/-23%/–).We value the stock at 28x 2025E PE,at par with its peers’average on Wind consensus. Ourtarget price is RMB12.54(previous: RMB13.52, based on 24x 2025E PE). Maintain BUY. Risks: lower capex indomestic semiconductor industrythanweexpect; fallingGPMofsemiconductorcleanroomconstruction;disappointingneworderconversion. Source:Wind, Huatai Research Source:Wind, Huatai Research Full financials Disclaimers Analyst CertificationI/We, FANG Yanhe, HUANG Ying, hereby certify that the views expressed in this report accurately reflect the personal views of the analyst(s) about the subject securities or issuers; and no part ofthe compensation of the analyst(s) was, is, or will be, directlyor indirectly, related to the inclusion of specific recommendations or views in this report. General Disclaimers and DisclosuresThis research report has been prepared by Huatai Financial Holdings (Hong Kong) Limited (hereinafter referred to as“HFHL”).The information herein is strictly confidential to the recipient. This report is intended for HFHL, its clients and associatedcompanies. Any other person shall not be deemed a client of theCompany merely from his or her receipt of this report. This report is based on information deemed reliable and publicly available by HFHL, but HFHL and its associated company(ies)(collectively, hereinafter“Huatai”)makes no guarantee as to the accuracyor completeness of such information. The opinions, assessments and projections contained herein only reflect the views and judgments at the issuance date. Huataimay issue research reports that contain inconsistent views, assessments and projections with those set out herein at differenttimes. The prices, values and investment returns of the securities or investment instruments referred to herein may fluctuate.Past performance is not a guide to future performance, future returns are not g