Wuxi Best Precision Machinery (300580) 天风证券·2024-07-24 12:00Investment Rating - The report assigns a "Buy" rating for the company with a target price of 20.4 CNY, indicating an expected return of over 20% within the next six months [24][101]. Core Insights - The company has a strong competitive advantage in the automotive parts sector, particularly in precision components and turbocharger technology, which are essential for improving fuel efficiency and reducing emissions [14][85]. - The rapid expansion of production capacity in the new energy vehicle (NEV) segment is expected to drive significant revenue growth, with a focus on lightweight and high-value precision components [20][73]. - The company has established a solid customer base, with major clients including Garrett, Cummins, and Bosch, contributing to a stable revenue stream [30][115]. Summary by Sections 1. Precision Processing and Technology Migration - The company has deep expertise in precision processing, which has allowed it to expand into new business areas such as industrial mother machines and humanoid robots [29][125]. - The establishment of subsidiaries like Anhui Best New Energy Vehicle Parts Co., Ltd. aims to enhance its presence in the NEV market [22][73]. 2. Automotive Parts Business - The automotive parts segment accounted for 89.58% of total revenue in 2023, with a gross margin of 34.46%, reflecting the high technical barriers of its main products [35][100]. - The company is actively expanding its production capacity for NEV components, with plans to produce 1.4 million units annually once fully operational [117][73]. 3. Financial Performance - The company reported a revenue of 1.34 billion CNY in 2023, a year-on-year increase of 22.4%, with net profit reaching 263.51 million CNY, up 15.13% [81][69]. - The report forecasts continued growth in revenue and net profit through 2026, driven by the expansion of its NEV component production [101][69]. 4. Market Trends and Opportunities - The shift towards lightweight vehicles is a significant trend in the automotive industry, with reductions in vehicle weight leading to improved energy efficiency and extended driving range for electric vehicles [18][87]. - The company is well-positioned to capitalize on the growing demand for precision components in the robotics sector, particularly as humanoid robots become more prevalent [122][125].