Tuopu Group(SH:601689) Southwest Securities·2024-06-28 08:30Investment Rating - The report assigns a "Buy" rating for Top Group (601689) with a target price of 73.50 CNY over the next six months [1][3]. Core Insights - Top Group is a leading platform-based automotive parts company that has successfully expanded its product lines beyond traditional interior and rubber damping products, which now account for only 55% of its revenue. The company has capitalized on opportunities in the new energy vehicle sector and has seen rapid growth since 2020, with a compound annual growth rate (CAGR) of 38.5% in total revenue and 47.4% in net profit from 2019 to 2021 [2][3][26]. - The company is focusing on three growth curves: lightweight and thermal management systems, which have increased their revenue share to 39%, and automotive electronics and drive actuators, which are expected to significantly boost revenue in the coming years [2][3]. Summary by Sections Company Overview - Founded in 1983, Top Group has been a key player in the automotive parts industry for nearly four decades, specializing in NVH damping systems, interior and exterior systems, lightweight components, chassis systems, smart cockpit parts, thermal management systems, air suspension systems, and intelligent driving systems [14][17]. Company Analysis - The company has successfully diversified its product offerings, with traditional damping and interior components now making up 33% and 22% of revenue, respectively, as of 2023. The lightweight chassis system has become the second-largest business segment, contributing 31% of revenue in 2023 [2][28]. - The automotive electronics segment has seen a CAGR of 8.5% from 2019 to 2023, with expectations for substantial growth as new products enter mass production in 2024 [2][3]. Financial Analysis - The company is projected to achieve a CAGR of 26.7% in net profit from 2024 to 2026, with earnings per share (EPS) expected to reach 2.45 CNY in 2024, 3.00 CNY in 2025, and 3.76 CNY in 2026. The corresponding dynamic price-to-earnings (PE) ratios are 24, 20, and 16, respectively [3][4]. - Revenue for 2024 is estimated at 197.01 billion CNY, with a growth rate of 35.02%, and net profit is expected to be 21.51 billion CNY, reflecting a growth rate of 26.50% [4][26]. Earnings Forecast and Valuation - The report anticipates a target PE of 30 for 2024, leading to a target price of 73.50 CNY for the stock [3][4].