XCC(SH:603667) Orient Securities·2024-08-28 08:03Investment 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 Views - 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]. - The company is actively advancing its screw rod business, with significant investments in R&D and production capabilities for automotive and robotics applications [1]. - The company has successfully developed a full range of bearings for robotics, enhancing its product offerings in the high-precision and high-load bearing segments [1]. Financial Summary - H1 2024 revenue breakdown: - Finished bearings and rings: 934 million CNY (flat YoY) - Wind power rollers: revenue decreased due to lower downstream installations, but sales and orders improved in Q2 - 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]. - H1 2024 gross margin improved to 16.55% (+1.16 percentage points YoY), while net profit margin slightly decreased to 4.51% (-0.45 percentage points YoY) [1]. - Profit forecasts for 2024-2026 are adjusted to 188 million CNY, 234 million CNY, and 260 million CNY respectively [2][3]. Product Development and Market Expansion - The company is expanding its automotive bearing products into the aftermarket and has successfully set up an automated assembly line for new projects with major domestic manufacturers [1]. - Two specialized workshops for screw rods are under construction, focusing on components for new energy vehicles and robotics, with initial deliveries to leading domestic and international clients [1]. - The company has developed new products in thermal management systems, transitioning from component manufacturing to system integration [1].