XZB(SH:603040) Southwest Securities·2024-10-29 10:31Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next six months [1]. Core Insights - The company reported a year-on-year revenue growth of 17.6% in Q3, achieving a total revenue of 5.0 billion yuan, with a net profit of 1.6 billion yuan, reflecting a 19.9% increase [1]. - In Q3 alone, the company generated 1.7 billion yuan in revenue, marking a 12.5% year-on-year increase, although it saw a 9.6% decline compared to the previous quarter [1]. - The company is a key supplier of precision components for valve transmission systems to major clients like Volkswagen and BYD, which supports future performance [1]. - Cost control measures have been effective, with a gross margin of 52.5% and a net margin of 33.9% for the first three quarters of 2024 [1]. Summary by Sections Financial Performance - For Q3, the gross margin was 52.3%, up 1.1 percentage points year-on-year, while the net margin was 31.7%, up 3.5 percentage points year-on-year [1]. - The company’s revenue for 2024 is projected to reach 583.30 million yuan, with a compound annual growth rate (CAGR) of 17.3% expected over the next three years [3][6]. Market Position - The company has established stable supply relationships with various clients in the automotive and bearing sectors, leading to a 48.1% year-on-year increase in revenue for the first half of 2024 [2]. - The company is expanding its product offerings in the cold forging industry, which is expected to contribute to future growth [2]. Profitability Forecast - The projected net profits for 2024, 2025, and 2026 are 2.1 billion yuan, 2.6 billion yuan, and 3.0 billion yuan, respectively, with corresponding price-to-earnings (PE) ratios of 15, 12, and 11 [2][3].