Sunlord(SZ:002138) ZHESHANG SECURITIES·2024-10-28 12:23Investment Rating - The report assigns a "Buy" rating for the company, Shunluo Electronics [8]. Core Insights - Shunluo Electronics is positioned as a leading manufacturer of chip inductors in China, with applications spanning communications, consumer electronics, automotive, photovoltaic storage, and data centers. The company is expected to experience sustained high growth in the automotive and photovoltaic sectors in 2024, driven by AI hardware innovations that will boost demand for inductors in consumer electronics and data centers, leading to better-than-expected profitability [2][3]. Summary by Sections Company Overview - Shunluo Electronics, established in 2000 and listed in 2007, is a high-tech enterprise specializing in the R&D, production, and sales of various chip electronic components. Its products are widely used in communications, consumer electronics, automotive electronics, and other fields [16][18]. Market Opportunities - The demand for inductors is expected to rise due to the rapid penetration of new energy vehicles, which require more inductors than traditional vehicles. In September, the retail sales of new energy passenger vehicles reached 1.123 million units, a year-on-year increase of 50.9% [32]. The global market for automotive power inductors is projected to reach $2.495 billion by 2029, with a CAGR of 5.9% [32]. Financial Forecast - The company’s revenue is projected to reach 61.31 billion, 75.78 billion, and 89.21 billion yuan for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 21.64%, 23.59%, and 17.72%. The net profit attributable to shareholders is expected to be 8.55 billion, 11.07 billion, and 14.06 billion yuan for the same years, with growth rates of 33.46%, 29.48%, and 27.01% [5][10]. Valuation - The company’s PE ratios for 2024-2026 are projected to be 27.82, 21.49, and 16.92, respectively. Given the certainty of the company’s earnings growth, a target PE of 32 times for 2025 is suggested, corresponding to a market value of 354.24 billion yuan and a target price of 43.95 yuan, indicating a potential upside of 45-50% from the current price [6][10]. Competitive Landscape - The global inductor market is highly concentrated, with major players like Murata, TDK, and Sunlord holding significant market shares. Shunluo Electronics ranks among the top three in the global market and is the leading manufacturer in China [30][31]. The company is well-positioned to benefit from the shift of traditional Japanese manufacturers towards high-end markets, as it continues to expand its product offerings in automotive and communication electronics [31].