Yunyi Electric(SZ:300304) CHINA DRAGON SECURITIES·2024-11-09 08:37Investment Rating - The investment rating for the company is "Accumulate" (首次覆盖) [1] Core Views - The company reported a revenue of 1.556 billion yuan for the first three quarters of 2024, representing a year-on-year increase of 31.77%, and a net profit attributable to shareholders of 307 million yuan, up 31.27% year-on-year [1] - The company's Q3 revenue reached 530 million yuan, a year-on-year increase of 16.27%, driven by active market expansion and increased product sales [1] - The gross profit margin for Q3 was 31.78%, an increase of 1.73 percentage points year-on-year, attributed to sales growth and cost reduction from economies of scale [1] - The company is expected to benefit from increased sales from major automotive clients such as Great Wall Motors, Geely, and Chery, as well as from entering the supply chains of BYD and Changan [1] Financial Performance Summary - The company achieved a net operating cash flow of 163 million yuan in Q3 2024, a significant improvement from a negative 81 million yuan in the same period of 2023, indicating a substantial improvement in operational conditions [1] - The company’s revenue is projected to grow from 2.292 billion yuan in 2024 to 3.762 billion yuan in 2026, with corresponding net profits expected to rise from 425 million yuan to 712 million yuan during the same period [2][4] - The company’s PE ratios for 2024, 2025, and 2026 are projected to be 17.8, 13.3, and 10.6 respectively, which are below the average PE ratios of comparable companies [2][4] Market Position and Growth Potential - The company is positioned as a leader in the smart power controller market, with expectations of continued global market share growth [1] - Growth segments such as smart wiper systems, sensor products, and semiconductor power devices are anticipated to maintain rapid growth, with the high-precision nitrogen-oxygen sensor products achieving world-leading levels in the aftermarket [1] - The company is expected to continue expanding its market share in traditional businesses while also seeing growth in emerging sectors [1]