PRCO(002225) 光大证券·2025-04-18 15:34Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [6]. Core Views - The company reported a revenue of 5.19 billion yuan for 2024, a decrease of 5.1% year-on-year, with a net profit attributable to shareholders of 135 million yuan, down 45.5% year-on-year [1][2]. - The decline in overall revenue is attributed to weak demand in the steel industry, while the new materials segment showed significant growth, with a 40.3% increase in revenue [2]. - The company is expected to benefit from the ramp-up of its active magnesium oxide business and the flexibility of its U.S. plant, leading to an upward revision of net profit forecasts for 2025 and 2026 [4]. Summary by Sections Financial Performance - In 2024, the company achieved a gross margin of 19.0%, a slight decline of 0.9 percentage points year-on-year, primarily due to weak downstream demand and intensified competition [3]. - The net profit margin for Q4 was 0.9%, down 2.3 percentage points year-on-year, reflecting the impact of increased R&D expenses related to the active magnesium oxide business [3]. Revenue Breakdown - The revenue from the steel refractory materials segment was 4.43 billion yuan, down 7.8% year-on-year, while the new materials segment generated 820 million yuan, up 40.3% [2]. - Domestic revenue was 3.74 billion yuan, a decrease of 6.6%, while overseas revenue was 1.45 billion yuan, down 1.2% [2]. Profitability and Cost Structure - The report indicates an increase in the R&D expense ratio to 4.9%, up 1.3 percentage points year-on-year, which is linked to the development of the active magnesium oxide business [3]. - The overall expense ratio increased to 16.9%, up 2.5 percentage points year-on-year, driven by higher sales and management expenses due to revenue decline [3]. Future Outlook - The net profit forecast for 2025 has been raised to 341 million yuan, a 152.5% increase from 2024, and for 2026, it is projected at 557 million yuan, a 63.2% increase [4]. - The company is expected to see a recovery in profitability as the prices of raw materials, particularly alumina, have started to decline from their peak levels [4].