XCC(SH:603667) Orient Securities·2024-08-28 07:43Investment Rating - The report maintains a "Buy" rating for the company with a target price of 14.79 CNY, based on a relative valuation method using a 29x PE ratio for comparable companies [2][4]. Core Insights - The company's H1 2024 performance met expectations, with revenue of 1.752 billion CNY (+1.01% YoY) and a net profit of 75 million CNY (-9.64% YoY). The second quarter showed a revenue increase of 5.92% compared to the previous quarter [1][2]. - The company is actively advancing its screw rod business, with significant investments in R&D and production capabilities for automotive and robotics applications [1][2]. - The gross margin improved to 16.55% (+1.16 percentage points YoY), while the net profit margin slightly decreased to 4.51% (-0.45 percentage points YoY) [1]. Financial Performance Summary - H1 2024 revenue breakdown: - Finished bearings and rings: 934 million CNY (flat YoY) - Wind power rollers: revenue declined due to lower downstream installations but showed improvement in Q2 sales and orders - Automotive parts: 196 million CNY (+14.20% YoY), with safety components at 92 million CNY (+32.90% YoY) - Thermal management system components: 545 million CNY (+7.20% YoY) [1]. - The company forecasts net profits of 188 million CNY, 234 million CNY, and 260 million CNY for 2024, 2025, and 2026 respectively [2][3]. Product Development and Market Expansion - The company is focusing on expanding its automotive bearing products and has successfully tested an automated assembly line for new projects with well-known domestic manufacturers [1]. - In the screw rod segment, the company is building specialized workshops and has begun small-scale deliveries to leading domestic and international clients [1]. - The company has developed a full range of bearings for robotics, catering to major robotics reducer manufacturers [1].