HNZK Electric.(300035) 长江证券·2024-11-18 08:48Investment Rating - The report maintains a "Buy" rating for Zhongke Electric (300035 SZ) [5] Core Views - Zhongke Electric's Q3 2024 performance exceeded expectations, driven by increased revenue and profitability due to higher proportion of fast-charging products and optimized product structure [5] - Revenue for the first three quarters of 2024 reached RMB 3 884 billion, a year-on-year increase of 10 27% [5] - Net profit attributable to the parent company was RMB 184 million, a significant year-on-year increase of 426 25% [5] - Q3 revenue was RMB 1 62 billion, up 25 8% year-on-year and 35 2% quarter-on-quarter [5] - Q3 net profit attributable to the parent company was RMB 114 million, up 66 5% year-on-year and 151 27% quarter-on-quarter [5] Financial Performance - The company's gross profit margin improved due to higher prices of fast-charging products and reduced graphite processing costs [6] - Q3 expense ratio was 9 71%, down 2 32 percentage points year-on-year and 2 17 percentage points quarter-on-quarter, indicating effective cost control [6] - Q3 net profit margin reached 7 06%, showing significant quarter-on-quarter improvement [6] Future Outlook - The company is expected to maintain strong production in Q4 2024, with full capacity utilization [7] - The Qujing joint venture base's first-phase integrated capacity is expected to reach production within the year, further reducing costs [7] - The company has secured fast-charging orders from major domestic and international customers, including CATL, AVIC, EVE, LG, and SK [7] - Q4 2024 is expected to see continued improvement in per-ton profitability due to high capacity utilization and favorable product pricing [7] Financial Projections - Revenue is projected to grow from RMB 4 908 billion in 2023 to RMB 11 929 billion in 2026 [17] - Net profit attributable to the parent company is expected to increase from RMB 42 million in 2023 to RMB 812 million in 2026 [17] - EPS is forecasted to rise from RMB 0 06 in 2023 to RMB 1 19 in 2026 [17]