YTCO(SH:600066) Huaan Securities·2024-09-30 05:37Investment Rating - Buy rating for Yutong Bus (600066) [1] Core Views - Yutong Bus is the leader in the large and medium-sized bus market in China, with a wide range of applications including public transport, tourism, and school buses [1] - The company's sales volume peaked at 71,000 units in 2016, with large and medium-sized buses accounting for 63,000 units, and hit a low of 30,000 units in 2022 [1] - Yutong's market share in the large and medium-sized bus segment increased from 36% in 2023 to 43% in the first eight months of 2024, further widening its lead over competitors [1] - The domestic bus market is in a recovery phase, with overseas export potential estimated at over 200,000 units, and global electric bus penetration at only 3%, indicating significant growth potential [1] - Yutong has a strong sales and service network, with a focus on direct sales and a significant advantage in the number of sales personnel compared to competitors [1] Financial Performance - Revenue is projected to grow from 34.13 billion yuan in 2024 to 43.02 billion yuan in 2026, with net profit increasing from 3.4 billion yuan to 4.57 billion yuan over the same period [1] - EPS is expected to rise from 1.5 yuan in 2024 to 2.1 yuan in 2026, with P/E ratios of 15.0x, 13.0x, and 11.2x respectively [1] - Overseas revenue accounted for nearly half of total revenue in 2023, driven by higher ASPs in export markets [28] Industry Analysis - The domestic bus market is in a recovery phase, with policies supporting the replacement of old buses expected to drive growth [38] - Overseas markets offer significant opportunities, with global electric bus penetration at only 3%, indicating substantial growth potential [1] - Yutong's export market share in large and medium-sized buses reached 30% in the first half of 2024, leading the industry [51] Competitive Advantage - Yutong has a dominant position in the domestic market, with a market share of 80% in the school bus segment and leading positions in other segments [43] - The company has a strong sales and service network, with over 1,600 service outlets in China and 320 authorized service stations overseas [53] - Yutong's focus on high-value large and medium-sized buses has supported its ASP and profitability, with a net profit margin leading the industry [35] Future Outlook - Yutong is expected to benefit from the recovery in the domestic bus market and the global trend towards electric buses, driving both revenue and profit growth [1] - The company's strong market position, extensive sales network, and technological advantages are expected to support its continued leadership in the industry [1][53]