Zhejiang Taotao Vehicles (301345) 华创证券·2024-11-02 17:37Investment Rating - The report maintains a "Recommend" rating for Taotao Vehicles (301345) with a target price of 85 yuan [1] Core Views - Taotao Vehicles achieved a 47.6% YoY revenue growth in Q3 2024, reaching 830 million yuan, and a 70.5% YoY increase in net profit attributable to shareholders, reaching 120 million yuan, exceeding market expectations [1] - The company's high revenue growth is primarily driven by the strong performance of its electric golf cart segment, which has become a core product category [2] - Despite short-term risks from US anti-dumping investigations, the company has rapidly implemented its "North America Manufacturing+" strategy and is transitioning some production to Vietnam to mitigate tariff risks [2] - The US golf cart market remains highly prosperous, and Taotao Vehicles is leveraging its cost-performance advantage to expand its dealer network and launch new products under its DENAGO brand [2] - The company's gross margin in Q3 2024 was 37%, down 4 percentage points YoY, mainly due to product mix, RMB appreciation, and rising shipping costs [2] - Sales, management, and R&D expense ratios decreased by 8.2, 0.9, and 0.3 percentage points respectively, contributing to a net profit margin of 14.4%, up 1.9 percentage points YoY [2] - Taotao Vehicles is accelerating its overseas channel expansion and capacity layout, particularly in the US and Vietnam, to support future growth [2] Financial Forecasts - Revenue is expected to grow from 2.144 billion yuan in 2023 to 5.163 billion yuan in 2026, with a CAGR of 34.1% [3] - Net profit attributable to shareholders is projected to increase from 280 million yuan in 2023 to 691 million yuan in 2026, with a CAGR of 35.4% [3] - EPS is forecasted to rise from 2.56 yuan in 2023 to 6.29 yuan in 2026 [3] - The company's P/E ratio is expected to decline from 17x in 2024 to 10x in 2026, reflecting strong earnings growth [3] Valuation and Investment Recommendation - The report values Taotao Vehicles using a DCF model, setting a target price of 85 yuan, corresponding to a 2025 P/E of 17.4x [2] - The company is positioned as a leader in the recreational riding products sector, with strong profitability and competitive advantages in both R&D and branding [2] - The electric golf cart segment is entering a period of rapid growth, supported by overseas capacity expansion and new product launches [2]