Baolong Automotive(603197) 国元证券·2024-11-01 08:00Investment Rating - Buy | Maintain [2] Core Views - The company's Q3 2024 revenue continued to grow significantly, reaching RMB 1.843 billion (yoy +19.75%, qoq +8.34%), driven by the rapid expansion of emerging businesses such as air suspension and sensors, while maintaining its core businesses like TPMS, valve stems, and automotive metal pipes [2] - Despite the revenue growth, profitability was under short-term pressure, with Q3 2024 gross margin at 24.60% (yoy -3.55pcts, qoq -0.48pcts) and net margin at 5.78% (yoy -3.93pcts, qoq +0.54pcts). The decline in profitability was attributed to higher equity incentive expenses and lower investment income compared to the same period last year [2] - The company has secured multiple air suspension projects, including 23 air spring damper assembly projects, 5 suspension controller projects, and 48 air tank projects, indicating strong growth potential in this segment [3] - The company plans to raise up to RMB 1.39 billion to expand its air suspension system manufacturing capacity, which is expected to further accelerate the growth of its air suspension business [3] Financial Performance Summary - Q3 2024 revenue: RMB 1.843 billion (yoy +19.75%, qoq +8.34%) [2] - Q3 2024 net profit attributable to shareholders: RMB 100 million (yoy -35.21%, qoq +24.87%) [2] - Q1-Q3 2024 revenue: RMB 5.026 billion (yoy +20.96%) [2] - Q1-Q3 2024 net profit attributable to shareholders: RMB 249 million (yoy -26.62%) [2] Future Projections - Expected revenue for 2024-2026: RMB 7.145 billion, RMB 8.636 billion, and RMB 10.635 billion, respectively [4] - Expected net profit attributable to shareholders for 2024-2026: RMB 397 million, RMB 512 million, and RMB 676 million, respectively [4] - Expected EPS for 2024-2026: RMB 1.87, RMB 2.41, and RMB 3.19, respectively [4] - Expected PE ratios for 2024-2026: 21.32x, 16.54x, and 12.52x, respectively [4] Business Highlights - The company has secured 10 OEMs for 23 air spring damper assembly projects, 2 OEMs for 5 suspension controller projects, and 17 OEMs and Tier 1 suppliers for 48 air tank projects, indicating strong market demand for its air suspension products [3] - The company's air suspension business is expected to benefit from the rapid penetration of air suspension systems in new energy vehicles, with capacity expansion plans in place to meet growing demand [3] Financial Ratios and Metrics - Q3 2024 sales/management/R&D/financial expense ratios: 3.09%/5.91%/7.92%/0.87% (yoy +1.01/-0.32/+0.45/-1.02pcts, qoq -0.61/-0.61/-0.31/-0.25pcts) [2] - Expected gross margin for 2024-2026: 26.09%, 26.29%, and 26.24%, respectively [10] - Expected net margin for 2024-2026: 5.56%, 5.93%, and 6.36%, respectively [10] - Expected ROE for 2024-2026: 12.22%, 12.91%, and 13.95%, respectively [10]