CAERI(SH:601965) GF SECURITIES·2024-08-28 03:33Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 26.86 CNY per share, unchanged from previous ratings [4][16]. Core Views - In the first half of 2024, the company's technical service revenue grew by 17.5% year-on-year, while the net profit attributable to shareholders, excluding non-recurring items, increased by 14.5% [2][9]. - The company achieved a total revenue of 2.0 billion CNY in the first half of 2024, representing a year-on-year growth of 20.4%. The net profit attributable to shareholders was 4.0 billion CNY (up 16.9%) and 3.8 billion CNY (up 14.5%) before and after non-recurring items, respectively [2][9]. - The technical service and equipment manufacturing segments generated revenues of 1.63 billion CNY and 370 million CNY, reflecting year-on-year increases of 17.5% and 35.1%, respectively. The growth in technical services is attributed to the company's focus on strategic advantages and emerging business opportunities, particularly in intelligent and new energy testing [2][9][12]. Financial Performance - The company's gross margin for the first half of 2024 was 40.6%, a decrease of 0.5 percentage points year-on-year, primarily due to the increased proportion of lower-margin equipment manufacturing [12][15]. - The net profit margin was 20.1%, down 0.7 percentage points year-on-year. The operating expense ratio was 14.9%, a decrease of 1.3 percentage points year-on-year, with specific expense ratios for sales, management, R&D, and financial costs showing varied changes [12][15]. - The company expects EPS for 2024, 2025, and 2026 to be 0.90 CNY, 1.03 CNY, and 1.18 CNY per share, respectively [16]. Business Strategy and Market Position - The company is positioned as a rare player in the automotive testing sector, benefiting from opportunities in electric and intelligent vehicles. It aims to transform into a data service provider and index platform [15][16]. - The integration of inspection and testing resources with its controlling shareholder, China Inspection Group, is expected to enhance market competitiveness and drive growth in testing business volume and pricing due to regulatory upgrades and new standards [15][16].