SJA(600609) 浙商证券·2024-10-29 10:23Investment Rating - The report initiates coverage with a "Buy" rating for the company [3][6][11]. Core Insights - The company is a leading supplier of automotive interiors and seats, primarily serving Brilliance BMW, and is expected to benefit from the new management under Shenyang Automotive [1][3]. - BMW Group plans to invest an additional 20 billion RMB in its Shenyang production base, which is anticipated to drive demand for automotive parts [2][3]. - The company is actively expanding its customer base beyond BMW, having acquired a secondary plastic parts supplier to enhance its service capabilities [3][9]. Summary by Sections Company Overview - The company specializes in the design, production, and sales of automotive interior components, seats, and rubber parts, with a significant focus on Brilliance BMW models [17][19]. Market Dynamics - The automotive interior market is expected to grow, driven by the increasing value of interior components such as seats and dashboards, which account for a significant portion of the vehicle's value [31][35]. - The average value of automotive interior components in China has increased from 8,137 RMB to approximately 8,500 RMB from 2019 to 2023 [32][34]. Financial Performance - In 2023, the company reported revenues of 5.14 billion RMB, a decrease of 8.73% year-on-year, with a net profit of 122 million RMB, down 18.89% [1][21]. - For the first half of 2024, revenues were 2.25 billion RMB, a decline of 17.03%, but net profit increased by 64.77% to 198 million RMB due to the recovery of debts from the bankruptcy restructuring of Brilliance Group [1][21]. Profitability and Valuation - The company is projected to achieve net profits of 322 million, 344 million, and 401 million RMB from 2024 to 2026, with corresponding EPS of 0.25, 0.26, and 0.31 RMB per share [3][11]. - The report estimates a target price of 7.37 RMB per share, indicating a potential upside of 40% from the closing price on October 29, 2024 [3][11]. Strategic Initiatives - The company is focusing on deepening its relationship with BMW while also exploring opportunities with other domestic automakers to diversify its revenue streams [3][9]. - The acquisition of a secondary supplier is expected to create synergies and enhance service offerings to BMW [3][9].