Baolong Automotive(SH:603197) Guoxin Securities·2025-09-03 15:23Investment Rating - The report maintains an "Outperform" rating for Baolong Technology [5][7]. Core Views - Baolong Technology's revenue for the first half of 2025 reached 3.905 billion yuan, a year-on-year increase of 24%, while net profit decreased by 9.15% to 135 million yuan, primarily due to North American tariffs, price wars among OEMs, and product mix issues [2][10]. - The company's gross margin for the first half of 2025 was 21.14%, down 5.31 percentage points year-on-year, influenced by product mix, tariffs, and price competition [3][19]. - Baolong Technology is a global leader in TPMS (Tire Pressure Monitoring System) and has a robust order book for new products, despite adjusting profit forecasts due to competitive pressures and product mix changes [5][39]. Financial Performance - In the first half of 2025, Baolong Technology's revenue from smart suspension systems grew by 50% to 637 million yuan, indicating strong demand in the high-end electric vehicle market [4][29]. - The company achieved a net profit margin of 3.42% in the first half of 2025, a decrease of 1.23 percentage points year-on-year, with various expense ratios showing a decline [3][19]. - The projected net profits for 2025, 2026, and 2027 are 390 million, 470 million, and 590 million yuan, respectively, reflecting a downward revision from previous estimates [5][6]. Market Position and Product Development - Baolong Technology has established a comprehensive product layout in the air suspension market, with significant breakthroughs in overseas orders for high-end models [4][31]. - The company has developed a diverse range of sensors, covering six categories and over 40 products, with an average value of approximately 1,000 yuan per vehicle [4][36]. - The air suspension market in China is expected to grow significantly, with projected deliveries reaching 300,000 units in 2026, indicating a substantial growth opportunity for Baolong Technology [29][31]. Customer Base and Competitive Advantage - Baolong Technology has a strong customer base, including major automotive brands such as Volkswagen, Audi, and Tesla, which supports its high sales growth [37][39]. - The company is the largest supplier of tire valve stems globally, with a stable demand for its products in the aftermarket [44][45]. - Baolong Technology's strategic partnerships and technological advancements position it well to capitalize on the growing demand for advanced driver-assistance systems (ADAS) and smart driving products [42][43].