IKD(SH:600933) Huachuang Securities·2024-09-01 02:08Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 20.4 CNY, compared to the current price of 12.30 CNY [2][5]. Core Views - The company's Q2 performance shows resilience, with revenue of 3.25 billion CNY, a year-on-year increase of 23%, and a net profit attributable to shareholders of 450 million CNY, up 14% year-on-year [2]. - The report highlights the company's strategic expansion in Mexico, Malaysia, and Europe, which is expected to strengthen its long-term growth outlook [5]. - Adjustments to the company's net profit forecasts for 2024-2026 reflect a growth rate of 9%, 22%, and 23% respectively, with corresponding PE ratios of 12x, 10x, and 8x [5]. Summary by Sections Financial Performance - In Q2 2024, the company achieved a revenue of 1.61 billion CNY, with a quarter-on-quarter decrease of 2%, attributed to overseas delivery schedules [2]. - The gross profit margin decreased to 27.7%, down 0.9 percentage points quarter-on-quarter, influenced by scale, raw material prices, and shipping costs [2]. - The net profit margin for Q2 was 14.1%, reflecting a slight decline [2]. Strategic Initiatives - The company is focusing on the transformation towards larger components, driven by the electrification trend, which is expected to significantly increase the value of aluminum castings per vehicle [2]. - The production from large-tonnage die-casting machines has already exceeded 15% of total output, with plans to increase this to over 25% by 2025 [2]. Market Position - The company has maintained a competitive edge in the small and medium-sized parts sector, with a consistent growth rate exceeding the global automotive industry by over 10 percentage points in the past decade [2]. - The report emphasizes the company's ability to achieve profitability levels above the industry average due to its efficient management practices [2].