Hongfa(600885) 国泰君安·2024-11-04 13:23Investment Rating - The report maintains an "Accumulate" rating for the company [2] Core Views - The company's Q3 2024 performance met expectations, with a gradual improvement in its overseas layout as the German factory has been completed and is set to begin production in 2025 [2] - The target price has been raised to 41.61 CNY from the previous 35.36 CNY, reflecting a positive outlook on the company's growth prospects [2][7] Financial Performance Summary - In Q3 2024, the company achieved a revenue of 3.638 billion CNY, representing a year-on-year increase of 12.19% and a quarter-on-quarter decrease of 3.71% [7] - The net profit attributable to shareholders for Q3 2024 was 425 million CNY, up 14.55% year-on-year but down 12.91% quarter-on-quarter [7] - For the first three quarters of 2024, the company reported a total revenue of 10.869 billion CNY, a 9.97% increase year-on-year, and a net profit of 1.269 billion CNY, up 15.07% year-on-year [7] Business Strategy and Market Position - The company is a leading player in the global relay market, holding a market share of 21.3% in 2023, an increase of 7.2 percentage points since 2019 [7] - The company is expanding its product categories, particularly in low-voltage electrical products, to create a new growth curve while maintaining its leadership in relay products [7] - The overseas layout has been enhanced with the completion of the German factory and significant growth in sales and profits from the Indonesian market, which saw a 157% increase in sales and an 89% increase in net profit year-on-year [7] Financial Forecast - The company’s projected earnings per share (EPS) for 2024, 2025, and 2026 are 1.56 CNY, 1.79 CNY, and 2.03 CNY respectively, reflecting adjustments from previous estimates [8] - Revenue is expected to grow from 14.62 billion CNY in 2024 to 18.40 billion CNY in 2026, with corresponding net profits increasing from 1.629 billion CNY to 2.119 billion CNY over the same period [8]