Bank of China Securities·2025-11-04 14:12Investment Rating - The report assigns a "Buy" rating to the company, with a market price of RMB 118.00 and a sector rating of outperforming the market [1]. Core Insights - The company is positioned to benefit from two major growth drivers: the mandatory installation of eCall terminals by July 2027, expected to create a market worth approximately RMB 16 billion, and the potential expansion into battery lifecycle management in collaboration with leading battery manufacturers [3][8]. - Revenue is projected to grow approximately sevenfold from 2024 to 2027, with net profit expected to increase by over five times during the same period [3]. Financial Summary - The company is forecasted to achieve net profits of RMB 1.99 billion, RMB 5.39 billion, and RMB 10.86 billion for the years 2025, 2026, and 2027 respectively, with corresponding earnings per share of RMB 1.90, RMB 5.15, and RMB 10.39 [5]. - The estimated price-to-earnings ratios for these years are 62.1, 22.9, and 11.4 respectively [5]. Business Overview - The company is a leading domestic supplier of vehicle communication terminals, with a strong market position in eCall and TBOX products [8][15]. - The company has a robust client base, including major domestic automotive brands such as SAIC Motor, Chery, and BYD, and has established a significant presence in the international market [8][26]. Market Opportunities - The implementation of the eCall national standard in China is expected to replicate the surge seen during the ETC installation wave, providing a high degree of revenue certainty [44]. - The eCall system is a critical safety feature that will be mandatory in all new vehicles starting July 2027, which is anticipated to significantly boost the company's sales [44][60]. Growth Potential - The company is also exploring opportunities in energy management solutions, which are expected to become a second growth curve, particularly in the context of battery lifecycle management [8][20]. - The transition to a service-oriented model in the battery industry, driven by leading manufacturers, presents substantial growth potential for the company [20][21].