GAC GROUP(601238) 东方证券·2025-04-27 01:23Investment Rating - The report maintains a "Buy" rating for the company with a target price of 8.82 CNY, based on an estimated EPS of 0.49 CNY for 2025 and a comparable company PE average of 18 times [3][6]. Core Insights - The company's gross margin is under short-term pressure, and it continues to deepen its collaboration with Huawei [2][9]. - The first quarter performance met expectations, with a revenue of 19.65 billion CNY, a year-on-year decline of 7.9%, and a net profit attributable to the parent company of -0.732 billion CNY, compared to 1.22 billion CNY in the same period last year [9]. - The company is accelerating the transformation of its joint venture brands towards electrification and intelligence, with significant new product launches expected to enhance market competitiveness [9]. - The company is pushing internal reforms for its self-owned brands and deepening cooperation with Huawei, aiming for a cost reduction of approximately 10% by 2025 [9]. Financial Summary - The company's projected financials for 2023A to 2027E show a revenue decline in 2024A to 106.798 billion CNY, followed by a recovery to 116.686 billion CNY in 2025E, with a CAGR of 7.9% from 2025E to 2027E [5][10]. - The gross margin is expected to improve from 5.8% in 2024A to 7.5% in 2027E, while the net profit margin is projected to stabilize around 3.7% by 2027E [5][10]. - The company anticipates a significant recovery in net profit attributable to the parent company, from 0.824 billion CNY in 2024A to 5.016 billion CNY in 2027E, reflecting a strong rebound in profitability [5][10].