LSKJ(SZ:300680)2025-05-20 12:23Investment Rating - The report indicates a positive outlook for the company, highlighting its strong growth potential in the new energy sector and the increasing market share of hybrid vehicles [2][4]. Core Insights - The company has experienced rapid growth over the past seven years, with a compound annual growth rate (CAGR) of 51.4% from 2018 to 2023, and a revenue of 1.64 billion yuan in the first three quarters of 2024, reflecting a growth of 38.5% [13][18]. - The company is benefiting from the high demand in the hybrid and electric vehicle markets, with its new energy business accounting for 52% of total revenue in 2023 [19]. - The company has diversified its operations into three main segments: EGR systems, new energy vehicle drive motor cores, and precision automotive components [13][20]. Summary by Sections Company Overview - The company, established in 2004 and headquartered in Wuxi, is recognized as a national "specialized, refined, distinctive, and innovative" small giant enterprise [6]. - The controlling shareholders have significant experience in the automotive industry, enhancing the company's operational capabilities [7]. Business Segments - The EGR system segment is the largest contributor to profits, while the new energy vehicle components segment generates the most revenue [20]. - The EGR market is projected to grow, but the overall market space is limited, with an expected size of 3.22 billion yuan by 2027 [26]. - The drive motor core segment is expected to see significant growth, with a projected market size of 11.33 billion yuan by 2027, driven by the increasing demand for electric vehicles [31]. Financial Performance - The company has seen its net profit grow from millions to billions over five years, with an expected net profit of 210 to 240 million yuan in 2024, representing a year-on-year growth of 43% to 63% [16][18]. - The company relies heavily on a few major clients, with the top five clients accounting for 65% of total sales in 2023 [37]. - The overall gross margin has been declining, primarily due to the lower margins in the new energy segment, with a gross margin of 18.6% in the first three quarters of 2024 [41]. Market Dynamics - The company is positioned as a leader in the EGR market, holding a 40% market share in the diesel engine EGR sector [23]. - The hybrid EGR products are becoming the mainstay of the EGR market, with a projected market share of nearly two-thirds by 2024 [24]. - The competitive landscape for motor cores is fragmented, with the company capturing approximately 16% of the market share in the first half of 2024 [33].