Wuxi Zhenhua(SH:605319) NORTHEAST SECURITIES·2026-01-21 07:05Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected stock price increase of over 15% within the next six months [8]. Core Insights - The company has shown robust growth in the first three quarters of 2025, achieving a revenue of 2.0 billion yuan, a year-on-year increase of 15.4%, and a net profit attributable to shareholders of 320 million yuan, up 27.2% year-on-year [1]. - The gross margin for the first three quarters stands at 28.4%, reflecting an improvement of 3.5 percentage points compared to the previous year [1]. - The stamping parts business remains the core driver of revenue growth, with a revenue of 850 million yuan in the first half of 2025, marking a year-on-year increase of 41.1% [1]. - The precision plating business has also shown high value, generating 90 million yuan in revenue with a gross margin of 77.4% [1]. Business Performance - The growth in performance is attributed to the recovery in demand from traditional customers and the ramp-up of projects with new energy clients [2]. - The company's assembly business is closely linked to SAIC's vehicle sales, which have been on a steady rise, with a significant increase of 38.7% in sales volume in the third quarter [2]. - The stamping parts business has benefited from partnerships with Tesla, Li Auto, and Xiaomi, contributing to increased output [2]. Future Growth Potential - The company is expanding its precision plating business into the semiconductor sector, which opens up long-term growth opportunities [3]. - A new investment of 200 million yuan is planned to establish a project for automotive power semiconductor components, aiming for an annual production capacity of 2 million sets [3]. - The company has secured a position in the supply chain for Infineon's power semiconductor plating, which is expected to provide additional revenue streams in the medium to long term [3]. Financial Projections - Revenue projections for 2025-2027 are estimated at 3.26 billion yuan, 4.15 billion yuan, and 4.89 billion yuan respectively, with net profits expected to reach 505 million yuan, 610 million yuan, and 711 million yuan [3]. - The corresponding price-to-earnings (PE) ratios are projected to be 16, 14, and 12 times for the respective years [3].