Investment Rating - The report initiates coverage with a Buy rating for the company, citing a 55% upside potential based on a 10x PE valuation for 2024 [5][10] Core Views - The company is a global leader in automotive exterior parts, with a strong track record of revenue and profit growth, achieving a 19.7% CAGR in revenue and 12.2% CAGR in net profit from 2006 to 2023 [5] - The company's globalization strategy has been highly successful, with overseas revenue growing at a 29.4% CAGR from 2006 to 2023, and overseas revenue accounting for over 50% of total revenue in H1 2024 [5] - The battery shell business is a key growth driver, with orders worth RMB 125.08 billion as of H1 2024, expected to contribute significantly to future revenue [5][6] - The company's financial metrics are improving, with free cash flow turning positive in 2023, and a potential valuation re-rating as profitability and ROE improve [6] Financial Projections - Revenue is projected to grow from RMB 23.91 billion in 2024 to RMB 34.42 billion in 2026, with a CAGR of 16.0%-21.5% [6][7] - Net profit is expected to increase from RMB 2.25 billion in 2024 to RMB 3.17 billion in 2026, with a CAGR of 18.3%-18.9% [6][7] - Gross margin is forecasted to remain stable at around 27.4% from 2024 to 2026 [6][7] Business Segments - Battery Shell Business: Expected to generate revenue of RMB 49.5 billion in 2024, growing to RMB 106.2 billion by 2026, with gross margins improving from 21% to 22.5% [11] - Plastic Parts Business: Revenue is projected to grow from RMB 66.4 billion in 2024 to RMB 92.4 billion in 2026, with gross margins stable at around 24%-24.5% [11] - Aluminum Trim Business: Revenue is expected to increase from RMB 48.5 billion in 2024 to RMB 60.8 billion in 2026, with gross margins remaining at 37% [11] Growth Catalysts - The company's battery shell business is expected to benefit from the rapid growth of the global electric vehicle market, with a projected market size of RMB 632 billion by 2025 [171] - The company's global factory layout and diversified customer base provide a competitive advantage in the face of rising tariffs and deglobalization trends [5][6] - The company's smart exterior business is seen as a future growth driver, with potential for significant revenue contribution in the coming years [5][6] Market Position - The company is a top player in the global battery shell market, with a market share of approximately 8% in 2023 [175] - The company's global presence and strong customer relationships, including partnerships with major automakers like Tesla, BMW, and Volkswagen, position it well for continued growth [175][176] Historical Performance - The company has consistently expanded its product portfolio, from traditional exterior parts to aluminum components and battery shells, driving ASP growth from RMB 60 to nearly RMB 1,700 [169][170] - Overseas revenue has grown significantly, from RMB 124 million in 2006 to RMB 9.97 billion in 2023, with a CAGR of 29.4% [5][84]
敏实集团：电池壳业务持续放量，全球化红利在黎明阶段