Ningbo Sunrise(002937) 德邦证券·2024-07-10 03:30Investment Rating - The report initiates coverage on Xingrui Technology (002937.SZ) with a positive outlook on its growth potential in the automotive electronics sector [19]. Core Insights - Xingrui Technology has shown significant revenue growth, particularly in automotive electronics, which has become a major revenue driver, while the share of mold products and consumer electronics in total revenue has gradually decreased [2][6]. - The company has successfully expanded its customer base, including international and domestic leading clients, particularly in the new energy vehicle (NEV) sector, which is expected to continue driving revenue growth [6][9]. - The report highlights the continuous improvement in gross margin, attributed to the increasing revenue from high-margin automotive electronics and smart terminal businesses [9][12]. Financial Overview - The company's total operating revenue from 2019 to Q1 2024 is projected to grow from 1.023 billion to 2.006 billion yuan, with a compound annual growth rate (CAGR) of approximately 41.16% in 2022 [6]. - Net profit attributable to shareholders is expected to rise from 138 million yuan in 2019 to 267 million yuan in 2023, reflecting a strong upward trend in profitability [6]. - The gross margin from 2019 to 2023 has improved from 28.57% to 26.91%, with a notable recovery post-2021 due to increased sales in high-margin products [9][12]. Product Revenue Composition - Automotive electronics have become the primary revenue source, with a significant increase in its revenue share over the past three years, while the contributions from mold products and consumer electronics have decreased [2][6]. - The report indicates that the automotive electronics segment is expected to continue contributing significantly to the company's revenue growth, despite a slight decline in smart terminal revenue in 2023 [6]. Market Trends - The report emphasizes the growing demand for embedded plastic components in the automotive sector, particularly in the context of the three-electric system (battery, motor, and electronic control) of new energy vehicles [37][48]. - The market for automotive electronic embedded plastic components is projected to grow at a CAGR of 27.6% from 2021 to 2025, indicating a robust growth outlook for the sector [64][70]. Competitive Advantages - Xingrui Technology's management team possesses extensive experience in precision manufacturing, which enhances its ability to capture market opportunities and drive growth [26]. - The company has established a strong R&D capability, enabling it to develop customized solutions in collaboration with key clients, thereby strengthening its competitive position in the market [80].