NBJF(SH:603997) Guoxin Securities·2025-08-21 05:24Investment Rating - The investment rating for the company is "Outperform the Market" [6][26]. Core Views - The company has experienced significant growth in its seating business, with a doubling of revenue in the passenger car seat segment. The integration of Grammer has led to improved profitability and cost efficiency [3][19]. - The company is expected to benefit from a strong order pipeline in new products such as hidden electric air vents and car refrigerators, which are anticipated to drive future growth [23][25]. - Despite short-term profit impacts from the divestiture of the loss-making subsidiary TMD, the long-term outlook remains positive with expectations of improved overseas business performance [26]. Summary by Sections Financial Performance - In the first half of 2025, the company achieved total revenue of 10.52 billion yuan, a year-on-year decrease of 4.39%, primarily due to reduced income from Grammer North America after the divestiture of TMD. However, net profit attributable to shareholders reached 150 million yuan, up 189.51% year-on-year [8][26]. - The second quarter saw a revenue of 5.486 billion yuan, a 4.08% decline year-on-year but a 9% increase quarter-on-quarter, mainly driven by the seating business. The net profit for Q2 was 49 million yuan, reflecting a 45% year-on-year increase [2][8]. Profitability Metrics - The company's gross margin for Q2 2025 was 14.39%, with a net profit margin of 0.89%, both showing improvements year-on-year. The increase in profitability is attributed to cost reduction and efficiency measures from the Grammer integration [2][11]. - The company has implemented various cost control measures, resulting in a positive profit contribution of approximately 28 million yuan from Grammer in Q2 [8][11]. Business Development - The passenger car seat segment is a significant market with a potential value increase per vehicle from 4,000 yuan to over 10,000 yuan. The company has secured 24 projects for passenger car seats as of July 31, 2025, with ongoing breakthroughs in global customer orders [3][19]. - The company is actively expanding its product offerings in the interior business, including hidden electric air vents and car refrigerators, which have shown substantial revenue growth [23][25]. Future Outlook - The company has revised its profit forecasts downward for 2025 and 2026 due to the impact of divesting TMD but maintains a positive long-term outlook with expected net profits of 590 million yuan, 1.03 billion yuan, and 1.39 billion yuan for 2025, 2026, and 2027, respectively [26][29]. - The company is positioned as a leading player in the domestic seating market, with significant opportunities for domestic substitution in the passenger car seat segment, which is currently dominated by foreign companies [19][22].