GONGNIU(SH:603195) Changjiang Securities·2024-11-04 07:23Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Views - The company demonstrated resilience in growth, with new business lines progressing steadily. For the first three quarters of 2024, the company achieved revenue of 126.03 billion yuan, a year-on-year increase of 9%, and a net profit attributable to shareholders of 32.63 billion yuan, up 16% [4][5]. - Traditional business growth is slowing down amid industry pressures, with Q3 revenue growth at 5% year-on-year. The electric connection segment is expected to see single-digit growth, while the smart electrical lighting segment is projected to grow in the mid-single digits, driven by market share gains and product category expansion [4][5][6]. - The gross margin slightly decreased by 1.2 percentage points in Q3 due to rising raw material prices and a slight decline in product prices. The sales expense ratio increased as the company continues to invest in long-term initiatives, including new product categories and international expansion [5][6]. - The company is enhancing its competitive edge in traditional business areas through product innovation and channel upgrades, including the introduction of new retail models and flagship stores [6][7]. - The new strategic business lines, particularly in the renewable energy sector, are expanding rapidly, with significant growth in charging stations and related products. The company has added over 5,000 new terminal outlets, bringing the total to over 22,000 [7]. - Profit forecasts for 2024-2026 estimate net profits of 44.0 billion, 48.7 billion, and 55.6 billion yuan, respectively, with corresponding valuations of 21X, 19X, and 17X [7]. Summary by Sections Financial Performance - For Q1-Q3 2024, the company reported revenue of 126.03 billion yuan, net profit of 32.63 billion yuan, and net profit excluding non-recurring items of 28.39 billion yuan, reflecting increases of 9%, 16%, and 8% respectively [4]. - In Q3 2024, the company achieved revenue of 42.17 billion yuan, net profit of 10.25 billion yuan, and net profit excluding non-recurring items of 9.36 billion yuan, with year-on-year growth of 5%, 3%, and a decline of 2% respectively [4][5]. Business Segments - The traditional business segment is facing growth challenges, with electric connections expected to see single-digit growth and smart electrical lighting experiencing a notable decline in growth rates [4][6]. - The renewable energy business, particularly charging stations, is expected to see over 100% growth in Q3, continuing its strong performance [4][7]. Strategic Initiatives - The company is focusing on product innovation, launching new products aimed at younger consumers and enhancing its market presence through new retail strategies [6][7]. - The international business is undergoing innovation and transformation, with efforts to expand overseas partnerships and localize product development [7].