ANHUI ZHONGDING(000887) HTSC·2024-11-01 08:30Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 18.49, up from the previous value of RMB 15.18 [5][8]. Core Views - The company has shown resilience in revenue growth despite a slight decline in Q3 due to weakened overseas demand, particularly in Europe. The revenue for Q3 reached RMB 4.826 billion, representing a year-on-year increase of 5.25% [1][2]. - The company is expected to enhance operational efficiency in overseas markets, leading to improved profitability [1]. - The growth momentum in the company's new business segments, particularly in air suspension and cooling systems, is anticipated to drive future revenue growth [4]. Summary by Sections Revenue and Profitability - Q3 revenue was RMB 4.826 billion, with a year-on-year growth of 5.25% and a quarter-on-quarter decline of 3.03%. The net profit attributable to shareholders was RMB 336 million, down 2.60% year-on-year and 5.52% quarter-on-quarter [1]. - For the first three quarters of 2024, the company achieved a revenue of RMB 14.495 billion, a year-on-year increase of 13.47%, and a net profit of RMB 1.052 billion, up 20.10% year-on-year [1]. Margin Analysis - The gross margin for Q3 improved by 0.42 percentage points year-on-year and 0.4 percentage points quarter-on-quarter. The net profit margin decreased by 0.40 percentage points to 7.02%, but the non-recurring net profit margin increased by 0.4 percentage points year-on-year [3]. - The company has maintained stable control over sales, management, and R&D expense ratios, which were 2.60%, 5.72%, and 4.65% respectively [3]. Business Growth Drivers - The company is focusing on expanding its market share in traditional business areas while also enhancing the value provided to core customers through new products in air suspension systems [2]. - The air suspension business is expected to contribute significantly, with new orders amounting to approximately RMB 1.27 billion announced in the second half of the year [4]. - The cooling systems segment is also being developed, with new products like liquid cooling plates being introduced [4]. Financial Forecast - The report maintains previous profit forecasts, estimating net profits for 2024, 2025, and 2026 to be RMB 1.453 billion, RMB 1.822 billion, and RMB 2.205 billion respectively [5][6]. - The estimated PE ratio for 2025 is set at 13.4 times, aligning with the average of comparable companies [5].