ZONGSHEN POWER(SZ:001696) Zhongyuan Securities·2025-04-10 08:25Investment Rating - The report assigns an "Add" rating for the company, indicating a potential price increase of 5% to 15% relative to the CSI 300 index over the next six months [30]. Core Insights - The company achieved a total revenue of 10.506 billion yuan in 2024, representing a year-on-year growth of 28.89%, and a net profit attributable to shareholders of 461 million yuan, up 27.45% from the previous year [7][8]. - The company plans to distribute a cash dividend of 2.00 yuan per 10 shares, totaling approximately 229 million yuan, which accounts for 49.64% of the net profit attributable to shareholders [7]. - The company is focusing on strengthening its traditional business while expanding into new energy and low-altitude economy sectors [1]. Summary by Sections Financial Performance - In 2024, the company reported a gross margin of 13.58%, a slight decrease of 0.97 percentage points year-on-year, while the net profit margin increased by 0.13 percentage points to 4.78% [9]. - The company’s operating revenue for the fourth quarter was 3.102 billion yuan, a year-on-year increase of 36.39%, with a non-recurring net profit of 74 million yuan, recovering from a loss of 51 million yuan in the same period last year [8]. Business Segments - General Machinery: Sales reached 4.8345 million units, a growth of 37.34%, with revenue of 5.226 billion yuan, up 35.33%, and net profit of 359 million yuan, increasing by 39.33% [12]. - Motorcycle Engines: Sales of 2.9852 million units, a growth of 18.44%, with revenue of 3.824 billion yuan, up 13.68%, and net profit of 153 million yuan, an increase of 18.84% [12]. - New Energy: Revenue reached 579 million yuan, a significant growth of 334.84% [12]. - High-end Components: Revenue of 506 million yuan, a growth of 7.05% [12]. Cost Management - The company effectively managed its expenses, with total expense ratios decreasing by 1.73 percentage points to 8.41% [10][13]. Strategic Positioning - The company is enhancing its traditional business through technological innovation and product upgrades, while also expanding its supply chain resilience and integrating its industry chain [14]. - The new energy business is positioned for growth, with a focus on electric drive systems, energy storage, and hydrogen energy products [15]. Earnings Forecast - Revenue projections for 2025 to 2027 are 12.293 billion yuan, 14.195 billion yuan, and 16.155 billion yuan, respectively, with corresponding net profit forecasts of 603 million yuan, 768 million yuan, and 968 million yuan [16][18].