KSHG(SH:605333) GOLDEN SUN SECURITIES·2024-10-29 13:53Investment Rating - The report maintains a "Buy" rating for the company [4][3]. Core Views - The company reported strong performance in Q3 2024, with revenue of 21 billion yuan, a year-on-year increase of 121% and a quarter-on-quarter increase of 12%. The net profit attributable to shareholders reached 1.8 billion yuan, reflecting a year-on-year increase of 902% and a quarter-on-quarter increase of 19% [1]. - The robust demand from downstream customers, particularly in the electric vehicle sector, has significantly contributed to the company's high growth in revenue and profit [1][2]. - The company is actively expanding its customer base, including partnerships with major automotive manufacturers such as Seres, Geely, Daimler, and NIO, which enhances its market coverage and future growth prospects [1]. Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 55 billion yuan, representing a year-on-year growth of 134%. The net profit attributable to shareholders was 4.4 billion yuan, a remarkable year-on-year increase of 2030% [1]. - The gross profit margin for Q1-Q3 2024 was 17.3%, up by 6 percentage points year-on-year, while the net profit margin was 7.9%, an increase of 9 percentage points year-on-year. In Q3 2024, the gross profit margin reached 20.5%, up by 8 percentage points year-on-year [2]. - The company expects continued growth in net profit, with projections for 2024-2026 being 6.3 billion yuan, 8.4 billion yuan, and 10.4 billion yuan, respectively [3]. Market Position and Growth Potential - The company is well-positioned to benefit from the expanding market for electric and intelligent vehicles, which require high-voltage wiring harnesses and advanced connectivity solutions. The demand for these products is expected to increase significantly [2]. - The company has established a comprehensive product lineup for high and low-voltage wiring harnesses and has sufficient production capacity to meet the growing industry demand and domestic substitution trends [2]. - The company is focusing on core technological capabilities, including the development of high-voltage connectors, which have already been adopted by several major automotive clients [2].