Baolong Automotive(603197) 东吴证券·2024-05-02 01:30Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative price increase of over 15% compared to the benchmark in the next six months [8][10]. Core Insights - The company's core business profitability recovery supports an overall gross margin increase, with the gross margin for 2023 at 27.4%, down 0.6 percentage points year-on-year. New businesses (sensors/air suspension) experienced a decline in gross margin due to production ramp-up and market competition, with margins down 3.0 percentage points and 1.7 percentage points respectively. Mature businesses (automotive metal pipe fittings/valve stems) benefited from post-pandemic recovery in overseas markets, with margins increasing by 4.7 percentage points and 4.9 percentage points respectively. The TPMS business saw a gross margin decline of 1.1 percentage points. The increase in profitability from mature businesses offsets the pressure from new business production ramp-up [1][9][25]. Financial Performance Summary - In 2023, the company achieved operating revenue of 5.9 billion yuan, a year-on-year increase of 23.4%. The net profit attributable to the parent company was 380 million yuan, up 76.9% year-on-year, while the net profit excluding non-recurring items was 290 million yuan, a significant increase of 251.9% year-on-year. For Q1 2024, the operating revenue was 1.48 billion yuan, with a year-on-year increase of 24.9% but a quarter-on-quarter decrease of 14.9%. The net profit attributable to the parent company was 68 million yuan, with a year-on-year decrease of 27.2% but a quarter-on-quarter increase of 69.8% [9][10][19]. Profit Forecast and Valuation - The report forecasts the company's revenue for 2024 and 2025 to be 7.8 billion yuan and 9.5 billion yuan respectively, with expected growth rates of 32% and 22%. The net profit attributable to the parent company is revised down to 500 million yuan and 650 million yuan for 2024 and 2025 respectively, with expected growth rates of 33% and 30%. The projected net profit for 2026 is 820 million yuan, with a growth rate of 26%. Corresponding P/E ratios are 18, 13, and 11 times for 2024, 2025, and 2026 respectively [10][18].