GONGNIU(SH:603195) Guotai Junan Securities·2024-11-03 08:17Investment Rating - The investment rating for the company is "Accumulate" [3] Core Views - The company's main business demonstrates operational resilience through cycles, while emerging businesses maintain high growth rates. The gross margin has slightly decreased due to raw material impacts, and the sales expense ratio remains high [2][17]. Summary by Sections 1. Performance Overview - In Q3 2024, the company achieved a revenue of 12.603 billion yuan, a year-on-year increase of 8.58%, and a net profit attributable to shareholders of 3.263 billion yuan, up 16% year-on-year. The Q3 revenue was 4.217 billion yuan, reflecting a 5.04% year-on-year growth, while the net profit was 1.025 billion yuan, up 3.36% year-on-year [13]. 2. Revenue Analysis - The company’s revenue resilience is supported by its extensive C-end network and emerging businesses. The electrical connection business is expected to grow at about 2%-3%, while the electric tools segment is accelerating. The smart electrical lighting business is more closely tied to real estate, with expected growth slowing to single digits. The new energy business is projected to maintain a doubling growth trend [14][15]. 3. Profitability Analysis - The gross margin for the first three quarters of 2024 was 43.12%, a year-on-year increase of 1.17 percentage points. The net profit margin was 25.89%, up 1.67 percentage points. The sales expense ratio is expected to continue a slight upward trend due to the expansion of overseas channels and domestic operations [16]. 4. Cash Flow and Financial Position - As of Q3 2024, the company had cash and trading financial assets totaling 13.626 billion yuan, a decrease of 1.15% year-on-year. The net cash flow from operating activities was 655 million yuan, down 37.2% year-on-year [17]. 5. Investment Recommendations - The company’s main business shows resilience, and emerging businesses continue to grow. The earnings per share (EPS) forecasts for 2024-2026 are adjusted to 3.37, 3.82, and 4.14 yuan, reflecting a year-on-year growth of 12.5%, 13.3%, and 8.4% respectively. The target price is set at 90.99 yuan, maintaining the "Accumulate" rating [18].