Hongfa(SH:600885) Soochow Securities·2024-08-09 11:30Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's H1 2024 performance met market expectations, with revenue of 7.23 billion yuan, up 9% year-on-year, and a net profit of 840 million yuan, up 15% year-on-year. Q2 2024 revenue was 3.78 billion yuan, up 12% year-on-year, and net profit was 490 million yuan, up 22% year-on-year [3][4] - The company is experiencing strong growth in the electric vehicle and fuel vehicle sectors, with expected growth of over 30% in Q2 due to increased market penetration and new product launches. The power sector is projected to grow by 10%-15% [3][4] - The company has seen significant cash flow improvements, with net cash inflow from operating activities of 1.22 billion yuan in Q2, up 40% year-on-year, and a 46% increase in contract liabilities [4] Financial Forecasts and Valuation - Revenue forecasts for 2024-2026 are adjusted to 14.696 billion yuan, 16.759 billion yuan, and 18.907 billion yuan, respectively, with year-on-year growth rates of 13.66%, 14.04%, and 12.82% [2][9] - The net profit forecasts for the same period are revised to 1.679 billion yuan, 1.985 billion yuan, and 2.316 billion yuan, with year-on-year growth rates of 20.53%, 18.21%, and 16.70% [2][9] - The target price is set at 40.3 yuan, based on a 25x PE for 2024, reflecting the company's leading position in the global market [4]