Baolong Automotive(SH:603197) Shanghai Aijian Securities·2025-11-03 11:08Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [2][3]. Core Insights - The company is expected to see a recovery in performance driven by the growth of its air suspension business, with projected net profits for 2025-2027 at 339 million, 413 million, and 538 million yuan respectively, corresponding to PE ratios of 23.5, 19.3, and 14.8 times [3][4]. - The company achieved a revenue of 6.048 billion yuan in the first three quarters of 2025, reflecting a year-on-year increase of 20.32%, although net profit was impacted by intensified price competition in the domestic automotive market [3][4]. - The company’s main business includes automotive intelligent driving systems and air suspension systems, with future growth expected from intelligent driving products and air suspension business [3][4]. Summary by Sections Financial Data and Profit Forecast - Total revenue is projected to grow from 5.897 billion yuan in 2023 to 12.897 billion yuan in 2027, with a compound annual growth rate (CAGR) of approximately 20% [4][29]. - The net profit is expected to fluctuate, with a significant drop in 2024 to 303 million yuan, followed by a recovery in subsequent years [4][29]. - The gross margin is forecasted to decline slightly from 27.4% in 2023 to 23.8% in 2027, indicating potential pressure on profitability [4][29]. Industry and Company Situation - The company is positioned in the automotive sector, focusing on intelligent driving systems and air suspension, with a market share of 19.7% in the air suspension segment as of August 2025 [3][4]. - The demand for intelligent driving products is expected to grow alongside the electrification and intelligence of vehicles, with a penetration rate of 52.09% for L2 and above intelligent driving in China as of Q1 2025 [3][4]. - The company’s TPMS business has a strong foothold with major global automotive manufacturers, benefiting from the increasing safety standards in the automotive industry [3][4]. Key Assumptions - The air suspension business is anticipated to grow significantly, with revenue growth rates projected at 49%, 76%, and 33% for 2025-2027 [3][4]. - The TPMS business is expected to maintain stable growth, with revenue growth rates of 22%, 23%, and 25% for the same period [3][4]. - The sensor business is projected to grow at approximately 18% annually from 2025 to 2027 [3][4].