GS(601500) Yong Xing Zheng Quan·2024-10-17 06:08Investment Rating - The report gives a "Buy" rating for the company, with a forecasted net profit of 6.45 billion, 9.69 billion, and 12.23 billion for 2024, 2025, and 2026 respectively, corresponding to PE ratios of 13x, 9x, and 7x [3][6]. Core Insights - The company is leading in tire intelligent manufacturing and accelerating its global strategic layout, with overseas market sales contribution increasing from approximately 14% in 2019 to 73% in 2023 [2][12]. - The tire industry is experiencing a favorable supply-demand dynamic, supported by rising global automotive sales and strong replacement demand, with the global tire sales expected to continue growing [2][19]. - The company is focusing on overseas dual-base expansion and product diversification, with significant capacity growth planned and a strategic goal to achieve over 50 million units of production capacity in the next decade [2][3][27]. Summary by Sections 1. Leading Tire Intelligent Manufacturing and Global Strategic Layout - The company has over 20 years of experience in the tire industry and has established modern production bases in China, Thailand, and Cambodia [12]. - The company’s brand "Qianlima" was recognized as one of China's top ten influential tire brands in 2023 [2]. - The company is entering a performance realization phase, with a net profit of 1.53 billion in Q1 2024, a year-on-year increase of approximately 1271% [2][15]. 2. Favorable Supply-Demand Dynamics in the Tire Industry - The global tire sales are expected to grow, driven by increasing automotive sales and strong replacement demand, with 2023 global tire sales reaching 1.785 billion units, a year-on-year increase of 2.3% [20]. - Emerging markets, particularly in Asia, have low per capita car ownership, providing significant growth potential for tire demand [22]. 3. Overseas Dual-Base Expansion and Future Growth Potential - The company is committed to R&D and is advancing its internationalization, smart manufacturing, and green upgrades, with plans for a 5G carbon cloud smart factory [2][3]. - The company’s production capacity is expected to increase significantly, with planned capacity reaching 38.45 million units by the end of 2023 [2][3]. - The revenue contribution from semi-steel tires has increased from about 4% in 2019 to 35% in 2022, indicating a shift towards higher-margin products [16][17]. 4. Profit Forecast and Investment Recommendations - The company’s revenue is projected to grow from 5.064 billion in 2023 to 11.439 billion in 2026, with a compound annual growth rate (CAGR) of approximately 22.9% [5]. - The net profit attributable to the parent company is expected to rise significantly, with a CAGR of about 1,175.5% from 2023 to 2024 [5].