XUSHENG(SH:603305) GOLDEN SUN SECURITIES·2024-09-01 10:17Investment Rating - The report maintains a "Buy" rating for the company [3]. Core Views - The company reported a revenue of 2.149 billion yuan in H1 2024, a year-on-year decrease of 8.95%, and a net profit attributable to shareholders of 265 million yuan, down 32.8% year-on-year [1]. - In Q2 2024, the company achieved a revenue of 1.01 billion yuan, with year-on-year and quarter-on-quarter declines of 15% and 11% respectively, and a net profit of 108 million yuan, down 46% year-on-year and 32% quarter-on-quarter [1]. - The company's performance was impacted by fluctuations in production from key customer Tesla, which saw a global production decrease of 8% and a 14% decline in China during Q2 2024 [1]. - The company is progressing steadily with its global expansion, including the establishment of a convertible bond project and the construction of a factory in Mexico, indicating substantial growth potential [1]. Financial Summary - The company is expected to achieve net profits of 590 million yuan, 720 million yuan, and 900 million yuan for the years 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 14, 12, and 9 times [1][2]. - The gross margin for Q2 2024 was reported at 21.65%, reflecting a decrease of 2.61 percentage points year-on-year and 2.16 percentage points quarter-on-quarter, primarily due to customer sales, rising aluminum prices, and the ramp-up of new factory capacity [1]. - The total revenue for 2024 is projected to be 4.895 billion yuan, with a growth rate of 1.3% year-on-year [2]. Industry Context - The automotive parts industry is experiencing a recovery, with domestic passenger car sales increasing by 11% quarter-on-quarter and U.S. automotive sales up by 10% in Q2 2024 [1]. - The company is one of the few in the industry that simultaneously masters three core processes: die-casting, forging, and extrusion, which positions it well for future growth [1].