Hongfa(600885) 海通证券·2024-11-02 04:09Investment Rating - The investment rating for the company is "Outperform the Market" [2][7]. Core Views - The company has shown steady revenue growth with a 9.97% year-on-year increase in revenue for the first three quarters of 2024, reaching 10.869 billion yuan, and a 15.07% increase in net profit attributable to shareholders, totaling 1.269 billion yuan [3][4]. - The company maintains a strong market position as a global leader in relays, benefiting from the rapid development of industries such as new energy vehicles and smart home technology [5][7]. Financial Performance Summary - For the first three quarters of 2024, the comprehensive gross margin was 35.17%, a decrease of 1.19 percentage points year-on-year [3]. - The operating expenses ratio for the first three quarters was 18.14%, an increase of 0.56 percentage points year-on-year, with a decrease in the sales expense ratio to 3.29% [3]. - In Q3 2024, revenue reached 3.638 billion yuan, a 12.19% increase year-on-year, with a net profit of 425 million yuan, reflecting a 14.55% increase [4]. Market Position and Growth Potential - The global electromagnetic relay market was valued at approximately 54 billion yuan in 2023, with a year-on-year growth of 3.6%, while the Chinese market reached about 37.18 billion yuan, growing by 5.1% [5]. - The company is expected to benefit significantly from the growth in smart home, industrial automation, and the rapid development of new energy vehicles and 5G communication [5]. Financial Forecasts - The company is projected to achieve net profits of 1.619 billion yuan, 1.898 billion yuan, and 2.233 billion yuan for the years 2024, 2025, and 2026, respectively [7][11]. - The estimated earnings per share (EPS) for 2024, 2025, and 2026 are 1.55 yuan, 1.82 yuan, and 2.14 yuan, respectively [7][11].