GUOMAO REDUCER(603915) Changjiang Securities·2024-11-07 06:20Investment Rating - The investment rating for Guomao Co., Ltd. is "Buy" and is maintained [3][6]. Core Views - The company's performance is under short-term pressure due to weaker demand and intense price competition in the reducer market. However, the long-term outlook remains positive as the company is expanding its product lines in general, specialized, and high-end reducers, which solidifies its growth trajectory [3][6]. - In Q3 2024, the company's revenue was 659 million yuan, a year-on-year decrease of 1.94%, while the net profit attributable to shareholders was 62 million yuan, down 34.40% year-on-year. The gross margin for Q3 was 21.66%, a decline of 3.91 percentage points year-on-year [3][4]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company reported revenue of 1.927 billion yuan, a decrease of 4.17% year-on-year, and a net profit of 209 million yuan, down 21.68% year-on-year. The net profit excluding non-recurring items was 177 million yuan, a decline of 27.38% year-on-year [3][4]. - In Q3 2024, the company experienced a revenue of 659 million yuan, a decrease of 1.94% year-on-year, and a net profit of 62 million yuan, down 34.40% year-on-year. The net profit excluding non-recurring items was 54 million yuan, a decline of 38.92% year-on-year [3][4]. Market Position and Strategy - The company is a leading player in the domestic general reducer market, with a market share expected to continue increasing. In the first half of 2024, the company's reducer sales (excluding Modoli products) grew approximately 4.23% year-on-year [3][5]. - The company is focusing on structural market opportunities in downstream sectors and has begun to establish a platform-based business layout. This includes advancements in general reducers, specialized/high-end reducers, and precision gearboxes [5][6]. Future Outlook - The manufacturing PMI reached 50.1 in October, indicating a marginal improvement and entering the expansion zone, suggesting that manufacturing demand is expected to gradually recover [3][5]. - The company anticipates achieving net profits attributable to shareholders of 309 million, 410 million, and 491 million yuan for the years 2024, 2025, and 2026, respectively, with corresponding price-to-earnings ratios of 20x, 15x, and 13x [6].