NBJF(603997) 长江证券·2024-11-28 01:18Investment Rating - The report maintains a "Buy" rating for Jifeng Auto Parts (603997 SH) [9] Core Views - The sale of TMD LLC is expected to improve Jifeng's overall profitability by removing a significant drag on earnings [5] - With Grammer's support, Jifeng is poised to become a rising star in the domestic seat industry, leveraging its production and R&D efficiency advantages [7] - Overseas integration is gradually showing results, and future improvements in overseas profitability are expected to bring substantial profit elasticity [7] Financial Performance and Projections - TMD LLC's financial performance: - 2023 revenue: 40 million, net margin: -16 5% [5] - Jan-Aug 2024 revenue: 30 million, net margin: -20 0% [5] - TMD LLC's net assets turned positive from -50 million by Aug 2024 after debt restructuring [5] - TMD LLC sale price: 37 57 million (-¥266 million), with -$33 10 million (-¥235 million) attributable to shareholders [6] - Projected net profit attributable to parent company: - 2024: -¥470 million - 2025: ¥904 million - 2026: ¥1 33 billion [7] - Valuation multiples: - 2025 PE: 17 3X - 2026 PE: 11 8X [7] Business Outlook - Jifeng has secured substantial orders and is expected to see significant profit growth from its passenger car seat projects [7] - The company's high self-sufficiency rate provides cost advantages in competing with global automakers [7] - Future profitability is expected to improve significantly from Q4 2024 onwards, following the TMD LLC divestiture [6]