LONCIN(SH:603766) KAIYUAN SECURITIES·2026-02-12 06:50Investment Rating - The report assigns a "Buy" rating for Longxin General (603766.SH) for the first time [1]. Core Views - Longxin General is a leading company in the motorcycle and all-terrain vehicle sectors in China, with a strategic focus on three main business areas: motorcycles, all-terrain vehicles, and general machinery. The company has made significant advancements in high-end motorcycles and smart garden machinery through continuous product innovation [2][4]. - The collaboration with Zongshen Power, a major shareholder, is expected to enhance the company's core competitiveness through synergies in technology research and development, supply chain management, and overseas channels [2][3]. - The company is projected to achieve net profits of 1.73 billion, 2.25 billion, and 2.70 billion yuan for the years 2025, 2026, and 2027, respectively, with corresponding EPS of 0.84, 1.10, and 1.31 yuan, leading to a PE ratio of 18.9, 14.5, and 12.1 times [2]. Financial Summary - The company's revenue is expected to grow from 13.066 billion yuan in 2023 to 27.396 billion yuan in 2027, with a compound annual growth rate (CAGR) of 15.2% [6]. - The net profit attributable to shareholders is projected to increase from 583 million yuan in 2023 to 2.698 billion yuan in 2027, reflecting a CAGR of 19.7% [6]. - The gross margin is expected to stabilize around 18% from 2024 onwards, while the net margin is projected to rise from 4.5% in 2023 to 9.8% in 2027 [6]. Business Development - Longxin General has optimized its business structure by focusing on core areas and divesting non-core businesses, which has led to improved profitability. The motorcycle and engine business revenue is expected to grow significantly, contributing to 75.4% of total revenue by 2024 [20][28]. - The company has established a comprehensive product matrix covering various motorcycle segments, including high-performance models under the "VOGE" brand, which is expected to drive growth in the mid to high displacement motorcycle market [20][39]. - The all-terrain vehicle (ATV) segment is also experiencing growth, with a revenue increase of 73.9% in 2024, supported by a robust product lineup and expansion into international markets [54][58]. Strategic Changes - The recent change in the company's shareholding structure, with Zongshen New Manufacturing becoming the controlling shareholder, is anticipated to bring significant synergies and enhance governance [3][22]. - The management team remains stable, with experienced leaders who have been with the company for many years, ensuring continuity in strategic execution [25][26]. Market Position - Longxin General has established a global distribution network covering over 90 countries and more than 2,000 sales points, enhancing its brand presence and operational capabilities [4][39]. - The company is well-positioned to capitalize on the growing demand for motorcycles and all-terrain vehicles, particularly in international markets, as it continues to innovate and expand its product offerings [4][39].