LY iTECH(002600) Orient Securities·2024-12-12 00:53Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 12.88 CNY based on a 28x PE valuation for 2025 [2][3]. Core Views - The company plans to acquire a 66.46% stake in Jiangsu Keda through a combination of convertible bonds and cash, aiming to expand its automotive business [1]. - Jiangsu Keda has a diverse customer base, including major automotive manufacturers such as Chery, SAIC, BYD, and Geely, and has established multiple production bases to support its clients [1]. - The acquisition will enhance the company's capabilities in automotive component design, manufacturing, and sales, further strengthening its product and customer matrix in the automotive sector [1]. - The company is positioned to benefit from the growth in AI-driven hardware innovation, particularly in the North American market, where it supplies precision components for major clients [1]. Financial Summary - The company forecasts earnings per share (EPS) of 0.30 CNY, 0.46 CNY, and 0.56 CNY for 2024, 2025, and 2026, respectively [2][7]. - Revenue is projected to grow from 34.12 billion CNY in 2023 to 41.29 billion CNY in 2024, reflecting a 21% increase [2][11]. - Net profit is expected to rise from 2.05 billion CNY in 2023 to 2.08 billion CNY in 2024, with a net profit margin improvement [2][11]. - The company’s gross margin is projected to be 17.7% in 2024, with a net margin of 5.0% [2][11].