宏发股份：全球继电器行业领先企业，行稳致远

Investment Rating - The report initiates coverage with a "Buy" rating for Hongfa Technology Co., Ltd. (600885) [31] Core Views - Hongfa Technology is positioned as a leading company in the relay industry, benefiting from its scale production capabilities and expected market share growth due to industry expansion [3][6] - The company has successfully established its first overseas factory in Indonesia, achieving significant sales growth and profitability [30] - The demand for relays is expected to rise due to the expansion of downstream industries, particularly in home appliances and automotive sectors, which together account for over 50% of relay applications [23][54] Summary by Sections 1. Company Overview - Hongfa Technology has a clear ownership structure and strategic layout, with major shareholders holding significant stakes [10] - The company has established R&D and production bases across various regions in China and has developed a marketing network in the Americas, Europe, and Southeast Asia [10] 2. Relay Business Growth - The relay business is experiencing rapid growth, with a projected increase in profitability [13] - The company holds a 21.6% global market share in the relay sector, maintaining its position as the market leader [29][68] 3. Downstream Demand and Market Trends - The relay market is supported by strong demand from various sectors, including home appliances, automotive, and renewable energy [23][50] - The automotive sector, particularly for electric vehicles, is driving demand for high-voltage relays, with the company’s products meeting the necessary specifications [28][54] 4. Financial Performance and Projections - Revenue is expected to grow from 129.30 billion RMB in 2023 to 180.97 billion RMB by 2026, with a steady increase in gross profit margins [31][81] - The company’s net profit is projected to reach 20.87 billion RMB by 2026, with corresponding PE ratios decreasing over the years [31][81] 5. Investment Recommendations - The report emphasizes that the revenue growth is primarily driven by relay products, highlighting the company's strong market position and growth potential [80]