HASCO(SH:600741) Soochow Securities·2024-10-31 14:47Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's Q3 2024 performance met expectations, with total revenue of 42.2 billion yuan, showing a quarter-on-quarter decrease of 5.4% but an increase of 4.8% year-on-year. The net profit attributable to shareholders was 1.61 billion yuan, reflecting a year-on-year decrease of 15.2% but a slight increase of 0.7% quarter-on-quarter [2] - The company continues to advance its neutralization strategy to mitigate sales pressure from SAIC clients. In Q2 2024, revenue from core clients such as SAIC, Tesla, BYD, and Geely increased by 9%, 31%, 11%, and 14% respectively. The company achieved revenue growth against the trend by enhancing the value of each vehicle and expanding its client base, with 62% of H1 2024 revenue coming from clients outside the SAIC Group [2] - Gross margin showed signs of recovery, with Q3 2024 gross margin at 12.3%, stable compared to the previous quarter. The company maintained good control over expenses, with a period expense ratio of 9.4% [3] - Operating cash flow showed volatility, with a net operating cash flow of 540 million yuan in Q3 2024, down 77% year-on-year. The company has ample cash on hand, with monetary funds amounting to 33.9 billion yuan at the end of Q3 2024 [3] Financial Forecasts and Valuation - Due to significant sales pressure from SAIC clients, the revenue forecasts for 2024-2026 have been revised down to 162.5 billion, 173.1 billion, and 182.6 billion yuan respectively, reflecting year-on-year changes of -3.6%, +6.5%, and +5.5%. The net profit forecasts for the same period have also been adjusted to 7.2 billion, 7.8 billion, and 8.3 billion yuan, with corresponding P/E ratios of 7, 6, and 6 times [4]