Wuxi Zhenhua(SH:605319) Huaxin Securities·2024-08-28 07:11Investment Rating - The report maintains a "Buy" rating for Wuxi Zhenhua (605319.SH) [1] Core Views - Wuxi Zhenhua's H1 2024 revenue reached 1.12 billion yuan, a year-on-year increase of 15.3%, with net profit attributable to shareholders at 158 million yuan, up 74.9% year-on-year [1] - The company has optimized its management structure, leading to a significant reduction in management expenses [1] - The transition towards new energy vehicles is ongoing, with increasing collaboration with major automotive manufacturers [1][2] Summary by Sections Financial Performance - In H1 2024, Wuxi Zhenhua reported total revenue of 1.12 billion yuan, with a gross margin of 24.5%, and a net profit of 158 million yuan [1] - The second quarter of 2024 saw revenue of 630 million yuan, a year-on-year increase of 14.9%, and a net profit of 80 million yuan, up 54.2% year-on-year [1] - The selective precision plating business achieved revenue of 89.13 million yuan in H1 2024, growing 116.3% year-on-year, with a gross margin of 81.8% [2] Market Position and Strategy - The company has been actively optimizing its customer structure since 2017, focusing on the new energy sector, with increasing orders from major clients like SAIC Volkswagen and Tesla [1][2] - The automotive market is expected to benefit from favorable policies and new product launches, driving growth in the second half of the year [2] Earnings Forecast - Revenue projections for Wuxi Zhenhua are 2.86 billion yuan for 2024, 3.53 billion yuan for 2025, and 4.33 billion yuan for 2026, with corresponding EPS of 1.42, 1.74, and 2.13 yuan [3]