Baolong Automotive(SH:603197) Guoxin Securities·2025-05-04 05:05Investment Rating - The report maintains an "Outperform" rating for Baolong Technology (603197.SH) [4][6]. Core Views - Baolong Technology's net profit in Q1 increased by 40% year-on-year, with expectations for accelerated performance release in 2025. The company achieved a revenue of 7.025 billion yuan in 2024, a year-on-year increase of 19.12%, and a net profit of 303 million yuan, a year-on-year decrease of 20.14%, primarily due to 124 million yuan in stock incentive expenses [1][10]. - The company is a global leader in TPMS (Tire Pressure Monitoring System) and has a robust order book for new products, despite a downward adjustment in profit forecasts due to product structure changes and increased competition [4][28]. Financial Performance Summary - In 2024, Baolong Technology's overall gross margin is projected to be 25.05%, a decrease of 2.35 percentage points year-on-year, influenced by the ramp-up of lower-margin ADAS products. The sales, management, and R&D expense ratios for 2024 are expected to be 3.29%, 5.81%, and 8.11%, respectively [2][13]. - The company reported a revenue of 19.99 billion yuan in Q4 2024, a year-on-year increase of 14.69%, and a net profit of 54 million yuan, a year-on-year increase of 34.71% [10][11]. Product and Market Positioning - Baolong Technology has a comprehensive product layout in air suspension, having secured a project with a well-known European OEM for a new platform, marking a significant breakthrough for domestic air spring suppliers [3][28]. - The company has developed a diverse range of sensors, covering six categories and over 40 products, with an average vehicle value of approximately 1,000 yuan per sensor [36][38]. - The air suspension market is expected to grow significantly, with projections indicating that by 2026, the annual delivery scale of passenger cars equipped with air suspension systems in China could reach 3 million units, corresponding to a market size of approximately 24 billion yuan [30][32]. Profit Forecasts and Financial Metrics - The profit forecasts for Baolong Technology have been adjusted downward, with expected net profits of 479 million yuan, 570 million yuan, and 689 million yuan for 2025, 2026, and 2027, respectively [4][5]. - The company’s revenue is projected to grow from 58.97 billion yuan in 2023 to 89.57 billion yuan in 2025, reflecting a compound annual growth rate of 27.5% [5].