Wencan(SH:603348) Minsheng Securities·2024-07-15 06:00Investment Rating - The report maintains a "Recommended" rating for the company, with a target price based on the closing price of 28.82 CNY per share on July 12, 2024, corresponding to a PE ratio of 25/15/11 for the years 2024-2026 [6]. Core Views - The company is expected to achieve a net profit attributable to shareholders of 0.7 to 0.9 billion CNY in the first half of 2024, representing a year-on-year growth of 403.2% to 547.0% [1]. - The second quarter of 2024 is projected to see a net profit of 0.2 billion CNY, reflecting a year-on-year increase of 57.0% and a quarter-on-quarter increase of 72.2% [1]. - The company continues to lead the industry in integrated die-casting, with significant recognition from foreign clients, which is expected to enhance its technical capabilities and product strength [1]. - The core customers, particularly in the new energy vehicle sector, are expected to drive substantial performance improvements due to increased production volumes and new project launches [1]. Summary by Sections Financial Performance - The company forecasts revenue of 6.943 billion CNY for 2024, with a growth rate of 36.1% compared to 2023 [5]. - The net profit attributable to shareholders is projected to be 307 million CNY in 2024, marking a growth rate of 508.7% [5]. - Earnings per share (EPS) are expected to be 1.16 CNY in 2024, with a PE ratio of 25 [5]. Market Position and Strategy - The company has secured multiple large-scale integrated structural component contracts from various automotive clients, indicating strong market demand and a solid competitive position [1]. - Recent contracts with foreign clients are expected to generate sales of 1.0 to 1.2 billion CNY over a project lifecycle of five years, starting production in 2026 [1]. - The company is actively expanding its global footprint through acquisitions, which is anticipated to accelerate growth and enhance market presence [1]. Customer Dynamics - The company is a key supplier for Huawei's Seres brand, providing aluminum die-cast components for several models, which are seeing significant sales growth [1]. - The new models from core customers are expected to significantly increase production capacity utilization, leading to improved financial performance [1].