Huaqin Technology (603296) 广发证券·2024-07-19 03:31Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 74.50 CNY per share based on a 24x PE valuation for 2024 [3][38]. Core Insights - The company plans to acquire 80% of EasyRoad Technology International Limited for approximately 2.85 billion HKD, with EasyRoad's 2023 revenue estimated at 4.549 billion HKD and net profit at 545 million HKD [1][12]. - The acquisition is expected to enhance both companies' technological capabilities, customer reach, and production capacity, particularly in audio and acoustic products [1][7]. - The company forecasts EPS of 3.10, 3.77, and 4.41 CNY for 2024-2026, reflecting a strong growth trajectory [1][33]. Summary by Sections Acquisition Significance - The acquisition of EasyRoad is aimed at strengthening the company's position in the audio product market, leveraging EasyRoad's established presence in high-fidelity headphones and other audio products [1][7]. - EasyRoad has been integrated into the Apple supply chain, which could provide significant opportunities for collaboration with the company [1][7]. EasyRoad Overview - EasyRoad specializes in audio and acoustic products, with a strong focus on R&D and manufacturing capabilities, including over 100 approved patents [9][13]. - The company operates four production bases in China and Vietnam, enhancing its manufacturing capacity [13]. Smart Wearable and AIoT Strategy - The demand for smart wearables and AIoT products is rapidly growing, with significant market opportunities projected through 2025 [17][20]. - The company has established a strong foothold in the smart wearable market, with a diverse product range including smartwatches and TWS earbuds [20][22]. Financial Forecast and Recommendations - The company anticipates revenue growth from its high-performance computing and smart terminal businesses, with projected revenues of 1,012.55 billion CNY in 2024, increasing to 1,495 billion CNY by 2026 [33][36]. - The report highlights the potential for improved profitability following the acquisition of EasyRoad, particularly in the smart wearable segment [33][34].