Xiantong Stock(SH:603239) KAIYUAN SECURITIES·2024-08-27 13:01Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a significant year-on-year increase in net profit for H1 2024, achieving a revenue of 555 million yuan, up 21.70%, and a net profit of 91 million yuan, up 69.97% [3][4] - The growth is attributed to strong performance from core customers such as Geely and Chery, as well as the launch of new models in the electric vehicle segment [3] - The company is expected to maintain steady growth due to favorable policies and the introduction of new products [3] - Profit forecasts for 2024-2026 are set at 217 million, 301 million, and 370 million yuan respectively, with corresponding EPS of 0.80, 1.11, and 1.37 yuan per share [3] - The current stock price corresponds to PE ratios of 14.9, 10.7, and 8.7 for 2024-2026, indicating a competitive advantage and high growth certainty [3] Financial Performance Summary - H1 2024 revenue reached 555 million yuan, a 21.70% increase year-on-year, while net profit rose by 69.97% to 91 million yuan [3] - The company's gross margin has been on an upward trend since Q3 2023, indicating improved profitability [4] - The company has secured over 120% of the projects it undertook in the entirety of 2023, primarily in the electric vehicle sector, enhancing its competitive edge [4] - Revenue projections for the next few years are as follows: 2024E at 1,250 million yuan, 2025E at 1,661 million yuan, and 2026E at 2,018 million yuan, with respective year-on-year growth rates of 17.3%, 32.9%, and 21.5% [6] - The net profit projections for the same period are 217 million yuan (2024E), 301 million yuan (2025E), and 370 million yuan (2026E), with year-on-year growth rates of 43.5%, 39.0%, and 22.8% [6] Market Position and Competitive Advantage - The company has over 90% of its production molds self-developed, allowing for reduced development and manufacturing cycles, which effectively lowers costs [5] - The shift towards electric vehicles has created opportunities for the company to capture market share as traditional fuel vehicle manufacturers face challenges [5] - The competitive landscape is shifting, with some foreign sealing strip companies underperforming in the domestic market, providing a favorable environment for the company to expand its market share [5]