Wuxi Best Precision Machinery (300580)2024-10-24 10:03Investment Rating - The report initiates coverage with an "Outperform" rating for the company [2][10]. Core Views - The company reported stable growth in its Q3 2024 results, with revenue of RMB 1.04 billion for the first three quarters, representing a year-on-year increase of 3.52%. The net profit attributable to shareholders was RMB 225 million, up 7.08% year-on-year. The gross profit margin (GPM) was 34.92%, an increase of 0.39 percentage points year-on-year, while the net profit margin (NPM) was 21.59%, up 0.56 percentage points year-on-year [2][10]. - In Q3 2024, the company achieved revenue of RMB 345 million, a decrease of 7.58% year-on-year and 2.63% quarter-on-quarter. The net profit for the quarter was RMB 81 million, reflecting a year-on-year increase of 0.97% and a quarter-on-quarter increase of 8.86%. The GPM for Q3 was 35.15%, down 1.34 percentage points year-on-year but up 0.97 percentage points quarter-on-quarter, while the NPM was 23.51%, up 1.99 percentage points year-on-year and 2.48 percentage points quarter-on-quarter [2][10]. - The company is advancing its three-tier development strategy, with significant progress in its C0-grade ball screw assembly and ongoing capacity ramp-up in Wuxi Best Precision Machinery. The Thailand project has commenced construction, enhancing the company's international growth prospects [2][10]. Financial Summary - The company forecasts net profits of RMB 314 million, RMB 418 million, and RMB 535 million for 2024, 2025, and 2026 respectively, with earnings per share (EPS) projected at RMB 0.63, RMB 0.84, and RMB 1.07 [2][10]. - Revenue is expected to grow from RMB 1.34 billion in 2023 to RMB 2.53 billion in 2026, with a compound annual growth rate (CAGR) of 26.3% [3][4]. - The gross profit margin is projected to remain stable around 34.4% to 34.7% over the forecast period [3][4]. Business Development - The company is focusing on high-end aviation equipment manufacturing and industrial automation, with key products including precision components for turbochargers and automation systems for aircraft manufacturing [6][10]. - The company has successfully developed new products and expanded its customer base, with notable achievements in the industrial machine tool sector and humanoid robotics [2][10].