Baolong Automotive(SH:603197) Southwest Securities·2024-09-04 01:11Investment Rating - The report maintains a "Buy" rating for Baolong Technology (603197) with a target price of 37.20 CNY over the next six months [1][6]. Core Insights - The company's revenue for the first half of 2024 reached 3.184 billion CNY, a year-on-year increase of 21.7%, while the net profit attributable to shareholders was 148 million CNY, a decrease of 19.4% [1]. - The decline in net profit is primarily attributed to increased stock incentive expenses and labor costs, which have pressured profitability [1]. - The company has seen significant growth in its air suspension and sensor segments, with air suspension revenue increasing by 44.5% year-on-year and sensor revenue rising by 51.7% [1][2]. Summary by Sections Financial Performance - In Q2 2024, the company achieved revenue of 1.7 billion CNY, a year-on-year increase of 19% and a quarter-on-quarter increase of 14.7% [1]. - The gross margin for H1 2024 was 27.1%, down 0.7 percentage points year-on-year, while the net margin was 4.94%, down 2.3 percentage points [1]. - The company's domestic revenue accounted for 49.7% of total revenue, reflecting a 7.3 percentage point increase year-on-year, indicating a growing domestic customer base [1]. Business Segments - The air suspension segment generated 420 million CNY in revenue in H1 2024, with a low penetration rate expected to grow as the market for vehicles priced above 300,000 CNY expands [1]. - The sensor segment's revenue reached 310 million CNY, benefiting from the increasing demand for various types of sensors in the context of electric and intelligent vehicle development [1][2]. - The TPMS segment reported revenue of 990 million CNY, a year-on-year increase of 19.7%, with the company being a leading global manufacturer in this area [2]. Profit Forecast and Valuation - The forecast for EPS from 2024 to 2026 is 1.86 CNY, 2.41 CNY, and 3.28 CNY, respectively, with corresponding PE ratios of 16, 12, and 9 [2][5]. - The report anticipates a compound annual growth rate (CAGR) of 22.5% for net profit attributable to shareholders over the same period [2]. - The average valuation of comparable companies is set at 20 times PE, leading to the target price of 37.20 CNY for Baolong Technology [6].