LONCIN(SH:603766) Guotou Securities·2025-07-24 08:59Investment Rating - The report initiates coverage with a "Buy-A" rating and sets a 6-month target price of 16.56 CNY per share, based on an 18x PE for 2025 [4][6]. Core Insights - The company is expected to achieve significant revenue growth, with projected revenues of 202.4 billion CNY in 2025, 235.7 billion CNY in 2026, and 272.8 billion CNY in 2027, alongside net profits of 18.9 billion CNY, 22.2 billion CNY, and 26.9 billion CNY respectively [37]. - The company has a strong market presence in both domestic and international markets, particularly in the motorcycle sector, with a focus on the "VOGE" brand and a strategic partnership with BMW that enhances its production capabilities [13][22]. Summary by Sections Domestic Market and Business Synergy - The company has over 30 years of experience in the motorcycle industry, initially focusing on engine production and later expanding into complete motorcycle manufacturing, including a long-term partnership with BMW [13]. - The acquisition by Zongshen is expected to create business synergies, enhancing competitiveness in the domestic market, with combined sales projected to surpass major competitors [20][22]. Brand Development and Product Growth - The "Wuji" brand, established in 2018, targets the mid-to-large displacement motorcycle market and has seen substantial growth, with revenues reaching 31.5 billion CNY in 2024, a 111.4% increase year-on-year [2][22]. - The company is actively expanding its product lineup, with successful launches of models like SR250 GT and CU525, and plans to introduce new models such as CU625 and DS625 in 2025 [32]. International Market Expansion - The company is focusing on core European markets, particularly Italy and Spain, where it has achieved a market share of 4.2% in Spain, with significant revenue growth in these regions [3][35]. - In 2024, overseas revenue reached 13.5 billion CNY, a 107.5% increase, with European sales contributing 10.2 billion CNY, reflecting a 133.4% growth [3][35]. Financial Projections - The report forecasts a robust financial outlook, with net profit margins expected to improve significantly, reaching 9.3% in 2025 and 9.8% in 2027, alongside a steady increase in return on equity [10][37]. - The company's strategic focus on high-demand motorcycle segments and international market penetration is anticipated to drive sustained revenue and profit growth [37].