HXG(SH:603112) Guoxin Securities·2024-09-11 03:30Investment Rating - The report assigns an "Outperform" rating to the company, indicating a positive outlook compared to the market [2][3]. Core Insights - The company is a leading comprehensive casting enterprise in China, focusing on multiple business lines, particularly in the white goods, engineering machinery, and automotive manufacturing sectors [2][3]. - The company has demonstrated strong revenue and profit growth, with a compound annual growth rate (CAGR) of 11.63% for revenue and 21.77% for net profit from 2017 to 2023 [2][3]. - The company is actively expanding its production capacity and optimizing its processes to enhance profitability, with a focus on high-margin machining components [2][3]. Financial Performance - Revenue for 2024 is projected to reach 40.88 billion yuan, reflecting a year-on-year growth of 25.25% [12][14]. - The net profit for 2024 is expected to be 4.76 billion yuan, with a year-on-year increase of 22.3% [14][15]. - The company's gross margin is anticipated to stabilize around 22.07% for the next three years [12][14]. Business Segments - Precision components, including parts for white goods and automotive applications, are expected to see significant growth, with revenue projected to increase by 30% in 2024 [11][12]. - The engineering machinery segment is also expected to grow steadily, with a projected revenue increase of 15% annually from 2024 to 2026 [11][12]. - The iron and recycled resources segment is facing challenges, with expected revenue declines of 20% to 50% over the next three years [12][13]. Shareholder Confidence - The company has implemented a stock incentive plan aimed at achieving a net profit CAGR of 20.76% over the next three years, reflecting strong confidence from major shareholders [9][10]. - A recent directed issuance of shares to the controlling shareholder aims to bolster the company's operational funds, further demonstrating shareholder support [10]. Valuation - The report estimates a reasonable valuation range for the company's stock between 14.19 and 16.37 yuan, based on projected earnings multiples [2][3].