RADICAL(300652) 华鑫证券·2024-11-07 14:07Investment Rating - Buy (Maintained) [1] Core Views - Traditional business is at an inflection point with strong profitability, driven by multiple new energy vehicle projects passing audits and receiving customer approvals, leading to increased revenue [1] - Revenue in 24Q3 reached 192 million yuan, up 9.4% YoY and 12.1% QoQ, with cumulative revenue for 2024 reaching 515 million yuan, up 11.2% YoY [1] - Gross margin in 24Q3 was 30.7%, down 4.1pct YoY but up 2.0pct QoQ, reflecting strong profitability despite structural changes in product shipments [1] - Acquisition of KGG to expand into precision screw business for robotics, enhancing competitiveness and extending the industrial chain [1][2] - KGG specializes in micro ball screws with advanced precision processing technology, widely used in high-precision industries such as semiconductors, 3C automation, and robotics [1][2] - Rapid capacity expansion with three factories, benefiting from the trend of domestic substitution in the bearing industry and new energy vehicle projects [3] - Revenue forecast for 2024-2026 is 778 million, 1.218 billion, and 1.495 billion yuan, with EPS of 1.22, 1.52, and 1.89 yuan, respectively [4] Financial Performance - 24Q3 net profit was 34 million yuan, down 12.9% YoY but up 32.5% QoQ, with non-GAAP net profit of 30 million yuan, down 15.7% YoY but up 26.0% QoQ [1] - Operating expenses in Q3 were 11.7%, up 0.6pct YoY but down 1.2pct QoQ, with stable R&D expenses [1] - Forecasted net profit for 2024-2026 is 125 million, 156 million, and 194 million yuan, with growth rates of 3.7%, 25.2%, and 23.9%, respectively [6] - ROE is expected to be 8.9%, 10.3%, and 11.8% for 2024-2026, reflecting steady improvement in profitability [6] Industry and Market Position - The company is positioned to benefit from the domestic substitution trend in the bearing industry, particularly in the new energy vehicle sector [3] - With the acquisition of KGG, the company is expanding into high-precision robotics and automation markets, leveraging KGG's expertise in micro ball screws [1][2] - The company's second factory is ramping up production, and the third factory is expected to be operational by the end of 2024, supporting future growth [3] Valuation and Metrics - Current PE ratios for 2024-2026 are 27.8x, 22.2x, and 17.9x, respectively, indicating potential for valuation re-rating as earnings grow [4] - Gross margin for 2024-2026 is forecasted at 27.8%, 24.9%, and 24.5%, with net margin at 16.0%, 12.8%, and 13.0% [6] - The company's asset turnover ratio is expected to improve from 0.4 in 2024 to 0.6 in 2026, reflecting better operational efficiency [7]