Zhejiang Rongtai(SH:603119) Soochow Securities·2025-06-26 07:04Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company plans to acquire a 15% stake in Jinli Transmission, entering the micro transmission module sector. This acquisition is expected to enhance the company's product offerings and market reach [9] - The target company, Jinli Transmission, is recognized as a leading brand in micro-special transmission, with significant technological expertise and a strong production capacity [9] - The financial forecasts indicate substantial revenue and profit growth, with expected net profits of 3.3 billion, 4.7 billion, and 6.4 billion yuan for 2025, 2026, and 2027 respectively, reflecting year-on-year growth rates of 42%, 45%, and 35% [9] Financial Projections - Total revenue is projected to reach 800.26 million yuan in 2023, increasing to 2,808.45 million yuan by 2027, with a compound annual growth rate (CAGR) of approximately 32.86% [1] - The net profit attributable to the parent company is expected to grow from 171.80 million yuan in 2023 to 638.24 million yuan in 2027, with a CAGR of 34.75% [1] - The earnings per share (EPS) is forecasted to rise from 0.47 yuan in 2023 to 1.75 yuan in 2027, indicating strong profitability growth [1] Market Data - The closing price of the company's stock is 44.98 yuan, with a market capitalization of 16,361.12 million yuan [6] - The price-to-earnings (P/E) ratio is projected to decrease from 95.23 in 2023 to 25.63 in 2027, reflecting improved earnings and valuation [1][10] Strategic Initiatives - The acquisition of Jinli Transmission is expected to facilitate the development of integrated solutions combining micro transmission and control systems, significantly expanding the company's product matrix [9] - The partnership will enable the company to jointly develop business with overseas clients, enhancing its international market presence [9]