Shenzhen VMAX New Energy (SH:688612) Southwest Securities·2024-07-22 09:00Investment Rating - The report assigns a "Buy" rating for the company with a target price of 39.00 CNY over the next six months [3][15]. Core Insights - The company is expected to benefit from the electrification trend, with fast charging and international expansion opening up growth opportunities. The global and Chinese market for vehicle power products is projected to grow at a CAGR of 16.2% and 18.0%, respectively, from 2024 to 2026 [3][15]. - The company is a leading third-party supplier of vehicle power systems, with a market share of 18.8% in onboard chargers (OBC) as of 2023. The gross margin for the company's integrated vehicle power products has been 2-6 percentage points higher than the industry average from 2021 to 2023, indicating a cost advantage [3][15]. - The company has achieved significant growth in overseas revenue, increasing from 0.2% in 2020 to 12.3% in 2023, with established relationships with major international automakers [3][15]. Financial Summary - Revenue is projected to grow from 55.23 billion CNY in 2023 to 102.11 billion CNY by 2026, with a growth rate of 44.09%, 29.08%, 24.22%, and 15.32% for the respective years [2][15]. - Net profit attributable to the parent company is expected to rise from 5.02 billion CNY in 2023 to 10.43 billion CNY in 2026, with growth rates of 70.42%, 30.94%, 30.95%, and 21.08% [2][15]. - The company's earnings per share (EPS) is forecasted to increase from 1.19 CNY in 2023 to 2.48 CNY in 2026 [2][15]. Business Segments - The vehicle power business is expected to see sales volumes of 2.59 million, 3.18 million, and 3.60 million units from 2024 to 2026, benefiting from the shift towards high-voltage and integrated products [7][39]. - The electric drive business is projected to grow at a rate of 5% annually from 2024 to 2026, with an increase in average selling prices [13][39]. - The company is also expanding its product matrix to include liquid-cooled charging modules and EV communication controllers, anticipating a 30% revenue growth in these segments from 2024 to 2026 [8][39]. Valuation and Estimates - The company is expected to achieve net profits of 6.6 billion CNY, 8.6 billion CNY, and 10.4 billion CNY from 2024 to 2026, with a CAGR of 27.6% [15]. - The report suggests a price-to-earnings (PE) ratio of 25 times for 2024, leading to the target price of 39.00 CNY [15].