KSHG(SH:605333) Southwest Securities·2024-08-28 13:31Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a significant increase in revenue and net profit for the first half of 2024, with revenue reaching 3.418 billion yuan, up 142% year-on-year, and net profit of 255 million yuan, up 722% year-on-year [1] - The gross margin improved to 15.4%, an increase of 4.2 percentage points year-on-year, while the net profit margin reached 7.5%, up 10.4 percentage points year-on-year [1] - The company is focusing on technological innovation and has seen a rise in the proportion of high-voltage wiring harnesses in its product mix, which is expected to drive further growth [2] Summary by Sections Financial Performance - In Q2 2024, the company achieved revenue of 1.885 billion yuan, a year-on-year increase of 149% and a quarter-on-quarter increase of 23% [1] - The net profit for Q2 2024 was 154 million yuan, up 1058% year-on-year and 53% quarter-on-quarter [1] - The company’s gross margin for Q2 2024 was 16.5%, up 5 percentage points year-on-year and 2.6 percentage points quarter-on-quarter, while the net profit margin was 8.2%, up 10.3 percentage points year-on-year [1] Market and Product Development - The company is expanding its market presence in the high-voltage wiring harness sector, which is crucial for electric vehicles, with a unit value exceeding 5000 yuan compared to 3000 yuan for traditional fuel vehicles [2] - The company has developed a full range of high-voltage connectors and charging sockets, with products already deployed in various automotive projects [2] Earnings Forecast - The company is projected to have earnings per share (EPS) of 1.36 yuan, 1.75 yuan, and 2.06 yuan for 2024, 2025, and 2026 respectively, with a compound annual growth rate (CAGR) for net profit of 155% [2] - The price-to-earnings (PE) ratios are expected to be 17, 13, and 11 for the same years [2]