Xiantong Stock(SH:603239) Southwest Securities·2024-10-22 02:30Investment Rating - The report maintains a "Buy" rating for Zhejiang Xiantong (603239) with a target price of 17.40 CNY over the next six months [1][6]. Core Insights - In Q3 2024, the company reported revenue of 287 million CNY, a year-on-year increase of 3% and a quarter-on-quarter increase of 0.5%. However, the net profit attributable to the parent company was 38 million CNY, down 12.5% year-on-year and 4.2% quarter-on-quarter [1]. - The gross margin for Q3 2024 was 28.9%, a decrease of 2 percentage points year-on-year, while the net margin was 13.2%, down 2.3 percentage points year-on-year [1]. - The company has seen a significant increase in its revenue from new energy vehicles, which accounted for approximately 15.3% of total revenue in H1 2024, up 5 percentage points from the previous year [1]. - The company is advancing its smart manufacturing capabilities and expanding its high-end production capacity, including the introduction of a new high-end rubber production line in Germany [1]. Summary by Sections Financial Performance - For Q1-Q3 2024, total revenue reached 842 million CNY, representing a year-on-year growth of 14.6%, while net profit attributable to the parent company increased by 33.2% to 129 million CNY [1]. - The report forecasts revenue for 2024-2026 to be 1.065 billion CNY, 1.237 billion CNY, and 1.468 billion CNY, respectively, with corresponding growth rates of 16.11% and 18.60% [3][5]. Profitability Metrics - The report projects the company's EPS for 2024, 2025, and 2026 to be 0.73 CNY, 0.87 CNY, and 1.04 CNY, respectively, with a corresponding PE ratio of 18, 15, and 13 [2][5]. - The net profit margin is expected to improve, with projections of 30.11% CAGR for net profit from 2024 to 2026 [2][5]. Market Position and Competitive Advantage - The company has secured over 120% of the total projects it undertook last year, primarily in the new energy vehicle sector, enhancing its competitive edge [1]. - The introduction of advanced production equipment and the expansion of production lines are expected to create approximately 1.8 billion CNY in advanced production capacity [1].