GS(601500) KAIYUAN SECURITIES·2024-07-31 08:00Investment Rating - The report assigns a "Buy" rating to the company, indicating expected performance to exceed the market by over 20% [3][25][37]. Core Views - The company is a leading player in the Chinese tire industry, actively expanding its global footprint with production bases in China, Thailand, and Cambodia. The report anticipates significant growth in performance due to the launch of new projects and an increase in overseas business contributing to improved profit margins [25][49]. - Projected net profits for 2024-2026 are estimated at 612 million, 933 million, and 1.248 billion yuan, respectively, with corresponding EPS of 0.38, 0.59, and 0.79 yuan. The current stock price corresponds to P/E ratios of 11.5, 7.6, and 5.7 for the same years [25][39]. Financial Summary - Revenue is projected to grow from 5,064 million yuan in 2023 to 11,663 million yuan by 2026, reflecting a year-on-year growth of 22.9%, 40.9%, 35.5%, and 20.6% respectively [39]. - The gross profit margin is expected to improve from 15.7% in 2023 to 19.7% by 2026, indicating enhanced profitability [39]. - The company has successfully increased its overseas revenue share to 73.03% in 2023, with a gross margin of 22.16% from international operations, significantly higher than domestic margins [51][52]. Market Position and Strategy - The company has implemented a "5X Strategic Plan" aiming to establish five major production bases and five R&D centers by 2030, enhancing its competitive edge in the market [38]. - The report highlights the company's proactive shift towards more profitable semi-steel tires, which accounted for 34.93% of revenue in 2022, with a gross margin of 14.20%, compared to 7.03% for full steel tires [51]. Production Capacity and Growth - The company is set to increase its production capacity significantly, with new projects in Thailand and Cambodia expected to come online, further driving revenue growth [49]. - The report notes that the company has successfully ramped up production, with tire output increasing from 658 million units in 2019 to 861 million units in 2022, and anticipates continued growth in sales volume [54].