TRANSSION(688036) 浦银国际证券·2025-02-27 08:23Investment Rating - The report maintains a "Buy" rating for Transsion Holdings with a target price of RMB 114.2, indicating a potential upside of 16.9% from the current price of RMB 97.7 [3][5][9]. Core Insights - Transsion Holdings has shown a good sequential improvement in revenue and profit for Q4 2024, laying a solid foundation for growth in 2025. The company is expected to rank fourth globally in smartphone shipments in 2024, with a market share of 8.7%, continuing to grow from 2023 [9][12]. - The growth drivers for 2025 include strong smartphone shipment growth, expansion in digital accessories and energy storage products, and accelerated growth in mobile internet business, benefiting from operational leverage [9][12]. - The DCF valuation method estimates a target price of RMB 114.2, with assumptions of a 1.8% risk-free rate, a 10% growth rate from 2030 to 2034, and a WACC of 6.1% [15][17]. Financial Summary - Revenue projections for Transsion Holdings from 2023 to 2027 are as follows: - 2023: RMB 62,295 million - 2024E: RMB 68,743 million (34% YoY growth) - 2025E: RMB 78,105 million (10% YoY growth) - 2026E: RMB 89,470 million (14% YoY growth) - 2027E: RMB 100,537 million (15% YoY growth) [4][10]. - Net profit projections are: - 2023: RMB 5,537 million - 2024E: RMB 5,590 million (123% YoY growth) - 2025E: RMB 6,080 million (1% YoY growth) - 2026E: RMB 7,363 million (9% YoY growth) - 2027E: RMB 8,511 million (21% YoY growth) [4][10]. - The gross margin is expected to fluctuate, with estimates of 24.5% in 2023, decreasing to 21.4% in 2024E, and then gradually improving to 22.0% by 2027E [4][10]. Performance Metrics - Q4 2024 performance highlights: - Revenue: RMB 17,491 million, down 9% YoY but up 5% QoQ - Net profit: RMB 1,687 million, up 2% YoY and up 60% QoQ [13]. - Adjusted forecasts for 2025E and 2026E show a decrease in revenue and profit expectations due to slightly lower than anticipated market share and gross margin improvements [12][13].