Baolong Automotive(SH:603197)2024-09-20 02:38Investment Rating - The report initiates coverage with a positive outlook on Baolong Technology, highlighting its potential in the air suspension market and other new energy vehicle products [1][10]. Core Views - Baolong Technology reported a revenue of RMB 3.18 billion for the first half of 2024, representing a year-on-year increase of 21.7%, while the net profit attributable to shareholders decreased by 19.4% to RMB 150 million [1][10]. - The company is focusing on the growth of air suspension, sensors, and TPMS, with respective revenue growth rates of 44%, 52%, and 20% year-on-year in the first half of 2024 [1][10]. - The report emphasizes the increasing demand for lightweight and intelligent automotive products, driven by energy-saving policies and the electrification of vehicles [11]. Financial Summary - For 2024, the expected revenue is RMB 7.116 billion, with net profit projected at RMB 402 million, leading to an EPS of RMB 1.90 [2][12]. - The company’s gross profit margin is expected to stabilize around 27.6% from 2024 to 2026, with net profit margins showing a gradual improvement [8][12]. - The forecast indicates a steady growth trajectory for revenue and net profit over the next three years, with significant contributions from the air suspension and sensor segments [3][4]. Product Segmentation - The air suspension segment is anticipated to grow significantly, with projected revenues of RMB 1.051 billion, RMB 1.576 billion, and RMB 2.364 billion for 2024, 2025, and 2026 respectively, reflecting a 50% growth rate [3][4]. - The sensor business is expected to achieve revenues of RMB 796 million, RMB 1.194 billion, and RMB 1.671 billion over the same period, with a growth rate of 50% in 2024 [3][4]. - The TPMS segment is projected to maintain stable growth, with revenues expected to reach RMB 2.293 billion in 2024, growing at 20% [3][4]. Valuation and Target Price - The report suggests a reasonable price-to-earnings (PE) ratio of 25 times for Baolong Technology in 2024, leading to a target price of RMB 47.42 [1][12].