Wuxi Zhenhua(SH:605319) EBSCN·2025-07-07 01:42Investment Rating - The report maintains a "Buy" rating for the company, with an updated target price of 37.03 CNY, corresponding to an 18x PE for 2025E [3][6]. Core Insights - The company has significantly exceeded expectations with core customer orders, particularly benefiting from its relationship with Xiaomi's automotive supply chain, which is expected to contribute 9.57% to the company's revenue in 2024 [1]. - The company's stamping business is experiencing new opportunities due to the growth in the new energy sector, with a projected revenue increase of 35.01% in 2025E [2]. - The company is expanding its production capabilities with a new project in Langfang, which is expected to enhance customer retention and attract new clients [3]. Summary by Sections Revenue and Profitability - In Q1 2025, the company reported a revenue of 600 million CNY, a year-on-year increase of 22%, with a gross margin of 28% [2]. - The forecast for net profit is adjusted upwards by 9% for 2025E, reaching 503 million CNY, with continued growth expected in subsequent years [3][5]. Business Development - The company has established a comprehensive production network across multiple locations, enhancing its ability to serve major clients like Xiaomi and Li Auto [3]. - The stamping business is set to expand further as sales from key clients like SAIC and Tesla recover, with SAIC's sales increasing by 12.35% in the first half of 2025 [2]. Financial Metrics - The company’s projected revenue growth rates are 32.65% for 2023, 9.23% for 2024, and 35.01% for 2025E, with net profit growth rates of 242.63% for 2023 and 33.13% for 2025E [5][11]. - The company’s return on equity (ROE) is expected to reach 17.7% by 2025E, indicating strong profitability [13].