SHUANGHUAN COMPANY(SZ:002472)2024-09-03 13:03Investment Rating - The report maintains an "Outperform" rating for the company [3][5]. Core Views - The company is experiencing growth driven by its electric vehicle (EV) gears and intelligent actuators, with profitability continuing to improve [2][8]. - Revenue for 1H24 reached RMB 4.32 billion, a year-on-year increase of 17.3%, with net profit at RMB 470 million, up 28.3% year-on-year [8][9]. - The company is expanding its product lines and enhancing market competitiveness, particularly in the EV sector and intelligent actuators [11][12]. Financial Performance - Revenue is projected to grow to RMB 9.47 billion in 2024, RMB 10.90 billion in 2025, and RMB 12.49 billion in 2026, with net profit forecasts of RMB 1.06 billion, RMB 1.26 billion, and RMB 1.51 billion respectively [12][7]. - The gross margin for 1H24 was 22.7%, with a net profit margin of 11.4%, both showing year-on-year improvements [10][11]. - The company’s main business segments include passenger car gears (55% of revenue), commercial vehicle gears (11%), construction machinery gears (7%), and intelligent actuators (6%), with respective growth rates of +28.5%, +3.8%, -8.3%, and +82.2% [9][10]. Market Expansion and Product Development - The company is accelerating the construction of its Hungary factory to expand its overseas market presence, aiming to benefit from the transformation of traditional European car manufacturers [11][12]. - The intelligent actuator product line has been expanded to include applications in smart vehicles, aligning with automotive intelligence trends [11][12]. Valuation - The target price has been raised to RMB 29.80, reflecting a 20x PE valuation for 2025, up from a previous target of RMB 28.70 [12][7].