盈利稳步提升，行业范围不断扩大。

EarningsSteadily Improving,Industry Scope Expanding Rating (Maintain):BUYTarget price (RMB):72.00 Huatai Research Quarterly Results Review 18 May 2025│China (Mainland) General Machinery AnalystNI ZhengyangSAC No. S0570522100004SFC No. BTM566nizhengyang@htsc.com+(86) 21 2897 2228 Veichi Electric released its 1Q25 results, reporting revenue/attributable net profit(NP)/recurringNPofRMB387/57/55mn(+18.16/+5.60/+4.34%yoy,-19.88/+63.85/+62.28%qoq).Thecompany’scoreindustrialcontrolbusinessmaintained steady growth, with product applications expanding across textile andmachine tool segments, and continued penetration into emerging sectors such asshipbuilding and port machinery. Meanwhile, progress in humanoid robotics isaccelerating. Wethusexpect earnings growth to remain on track. Maintain BUY. AnalystYANG YunxiaoSAC No. S0570523070001SFC No. BVI795yangyunxiao@htsc.com+(86) 21 2897 2228 AnalystSHENJianguoSAC No. S0570522020002SFC No. BSK177shenjianguo@htsc.com+(86) 755 8249 2388 Industrial controlgrew steadily, overseas momentum sustainedThe company’s industrial control product revenue remainedsteadyin 1Q25, with revenue from variable frequency drives/servo and control systems/digital energyproductsatRMB232/133/10mn(+17.95/+9.76+1,215.77%yoy).Byregion,domestic core business revenue was RMB280mn, up 15.33% yoy, while overseasrevenueamountedtoRMB99mn,up28.74%yoy.Thecompany’soverseasbusiness is mainly focused on general-purpose industrial control and photovoltaicwater-pumping systems in Belt and Road countries across Asia, Africa, and LatinAmerica, where itfaces minimum impact fromtradepoliciesand continues to seerevenuegrowthmomentum. Key data GPMdeclined onrevenue mix shift; effective expense controlVeichiElectricpostedaGPMof37.71%in1Q25(-2.39/+1.85ppyoy/ qoq),primarily due to a higherrevenue sharefrom project-based businesses such asdata centers and energy storage,in our view, which led to structural decline inGPM.In 1Q25, the overall expense ratiowas22.64% (-1.91/-5.55ppyoy/qoq).Specifically,sales/administrative/R&D/financialexpenseratiowas7.40/4.42/12.71/-1.90% (-0.27/-0.82/-1.22/+0.40pp yoy,-1.60/-0.75/-3.11/-0.09ppqoq).We attribute the notable declines in its overall expense ratioprimarily to itsrefined expense control initiatives. Source:Wind Expanding along equipment value chain andacross new industriesIn key sectors such as textiles and machine tools, the company continues to expand from single equipment to multiplesegments. For example, in textiles, itsreach is extending from water-jet looms to air-jet looms, draw texturing machines,and twisters. Domestically, the company benefits from the energy-saving retrofittrend and is actively developing its shipbuilding and port machinery business.Overseas, it is expanding beyond general applications to areas such as oil and gasand elevators, especially in CIS regions.Additionally, the company is investing incore componentsfor roboticssuch as hollow cup motors and rotary joints. It hasalso established a joint venture,ShenzhenWeidali, focused on joint modules, andparticipatedinroboticsmanufacturerKepler,acceleratingbusinessprogressthrough investmentinitiatives. Earnings forecasts and valuationWemaintainour2025/2026/2027 attributableNPforecastsatRMB304/366/437mn, corresponding to EPS of RMB1.44/1.73/2.07.We valuethestock at50x 2025E PE, in line withits peers’average on Wind consensus,for ourtarget price of RMB72.00(previous:RMB72.00,based on 50x 2025E PE). Risks: disappointing new product marketing; forex fluctuations; slower progress inhumanoid robotbusiness than we expect. Source:Wind, Huatai Research Source:Wind, Huatai Research Full financials Disclaimers Analyst CertificationI/We, NI Zhengyang, YANG Yunxiao, SHEN Jianguo, 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 of the compensation of the analyst(s) was, is,or will be, directly or indirectly, related to the inclusion of specific recommendations or views in this report. GeneralDisclaimers 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 the Company 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 accuracy or 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