FARATRONIC(600563) Caixin Securities·2024-10-18 04:38Investment Rating - The report assigns a rating of "Buy" to the company, indicating a positive outlook for the stock's performance relative to the market index [1]. Core Insights - The company's profitability is improving quarter by quarter, with a revenue of 2.117 billion yuan in the first half of 2024, representing a year-on-year growth of 7.38%. However, the net profit attributable to shareholders decreased by 1.86% year-on-year [4][5]. - The main growth drivers for the company's future performance are the electric vehicle and photovoltaic sectors, which are expected to contribute significantly to revenue growth [5][7]. - The company is expanding its overseas production capacity, with plans to establish a subsidiary in Hungary to serve European electric vehicle customers, enhancing its international competitiveness [7]. Financial Forecasts - The company is projected to achieve revenues of 47.24 billion yuan, 56.41 billion yuan, and 66.69 billion yuan for the years 2024, 2025, and 2026, respectively, with year-on-year growth rates of 21.76%, 19.41%, and 18.23% [7][8]. - The net profit attributable to shareholders is expected to be 11.31 billion yuan, 13.25 billion yuan, and 15.40 billion yuan for the same years, with growth rates of 10.43%, 17.19%, and 16.18% [7][8]. - Earnings per share (EPS) are forecasted to be 5.03 yuan, 5.89 yuan, and 6.84 yuan for 2024, 2025, and 2026, respectively [7][8]. Profitability and Margins - The company's gross margin for the first half of 2024 was 34.08%, a decrease of 4.69 percentage points year-on-year, primarily due to product mix adjustments and intensified competition in the downstream market [5]. - The gross margin is expected to gradually improve in the future as the company continues to reduce costs through technological advancements and as the photovoltaic market recovers [5]. Research and Development - The company's R&D expenses have been increasing annually, with 75.1153 million yuan spent in the first half of 2024, a year-on-year increase of 17.01%. This investment is aimed at enhancing the company's technological capabilities and maintaining its competitive edge in the international market [5][7].