ToLand(300855) 民生证券·2024-10-20 08:03Investment Rating - The report maintains a "Recommend" rating for Tunan Co Ltd (300855 SZ) with a current price of 25 49 yuan [1] Core Views - Tunan Co Ltd is one of the few domestic companies capable of batch producing both deformed and cast superalloys The company focuses on its core business of new materials while expanding into the midstream and downstream of the industrial chain opening up long-term growth potential [1] - The company's operating cash flow improved significantly in 13Q24 with a notable enhancement in collection efficiency [1] - The report adjusts profit forecasts considering downstream demand trends and expects net profits attributable to the parent company for 20242026 to be 3 55 billion yuan 4 65 billion yuan and 6 09 billion yuan respectively with corresponding P/E ratios of 28x 22x and 17x [1] Financial Performance Summary Revenue and Profit - In 13Q24 Tunan Co Ltd achieved revenue of 10 8 billion yuan a year-on-year increase of 1 3% and net profit attributable to the parent company of 2 58 billion yuan a year-on-year increase of 2 9% [1] - In 3Q24 the company's revenue was 3 48 billion yuan a year-on-year decrease of 18 6% and net profit attributable to the parent company was 0 67 billion yuan a year-on-year decrease of 15 7% [1] Profit Margins - The gross profit margin for 3Q24 increased by 0 2 percentage points year-on-year to 35 8% while the net profit margin decreased by 2 1 percentage points to 30 6% [1] - For 13Q24 the net profit margin decreased by 2 7 percentage points to 23 9% mainly due to increased period expenses and reduced investment income [1] Expenses and R&D - In 13Q24 the company's period expense ratio increased by 1 3 percentage points to 8 6% with R&D expenses increasing by 34 5% year-on-year to 0 53 billion yuan [1] - The company continued to increase R&D investment in line with project requirements and progress [1] Cash Flow and Assets - Operating cash flow turned positive in 13Q24 with a significant improvement in collection efficiency The operating cash flow for the first three quarters was 2 25 billion yuan compared to -0 03 billion yuan in the same period last year [1] - Accounts receivable and notes decreased by 32 6% compared to the end of 2Q24 while inventory decreased by 0 2% [1] Industry and Market Position - Tunan Co Ltd is a core supplier in the high-temperature alloy and products sector with a strategic layout in the midstream and downstream of the industrial chain [1] - The company's position in the high-growth "two engines" (aerospace and gas turbines) sector supports its long-term growth potential [1] Financial Forecasts Revenue and Profit Growth - The report forecasts revenue growth rates of 7 5% 20 6% and 19 3% for 2024E 2025E and 2026E respectively [2] - Net profit attributable to the parent company is expected to grow by 7 4% 31 1% and 30 8% for the same periods [2] Key Financial Ratios - The gross profit margin is expected to improve from 34 1% in 2024E to 39 77% in 2026E [2] - The net profit margin is projected to increase from 23 85% in 2024E to 28 42% in 2026E [2] - ROE is forecasted to rise from 17 26% in 2024E to 22 18% in 2026E [2] Valuation Metrics - The P/E ratio is expected to decrease from 28x in 2024E to 17x in 2026E reflecting the company's growth potential [2] - The P/B ratio is projected to decline from 4 9x in 2024E to 3 7x in 2026E [2]