Huarui Precision(SH:688059) GF SECURITIES·2024-02-26 16:00Investment Rating - The investment rating for the company is "Buy" with a current price of 61.02 CNY and a fair value of 92.84 CNY [2]. Core Insights - The company achieved a revenue of 794 million CNY in 2023, representing a year-on-year growth of 32%, while the net profit attributable to the parent company was 158 million CNY, down 5% year-on-year. The performance met expectations, with ongoing investments in R&D and market expansion [16][24]. - The company is focusing on high-value products and expanding its presence in overseas markets, particularly in the aerospace sector, where demand for cutting tools is increasing [1][24]. - Profitability is expected to improve, with projected net profits of 158 million CNY, 230 million CNY, and 318 million CNY for 2023, 2024, and 2025 respectively, based on a PE ratio of 25 for 2024 [24]. Summary by Sections Financial Performance - In Q4, the company reported a revenue of 206 million CNY, a 4% increase year-on-year, and a net profit of 52 million CNY, a decrease of 12% year-on-year, with a net profit margin of 25% [1]. - The overall hard alloy tools are gradually increasing in volume, with significant applications in the 3C, mold, and aerospace industries [1][24]. Market Position and Strategy - The company is actively researching difficult-to-process materials for aerospace applications, having made progress in developing coating tools for heat-resistant alloys [1]. - The company plans to increase investment in automotive and other fields, leveraging its mature development and manufacturing capabilities [24]. Valuation and Forecast - The company is expected to maintain a stable growth trajectory, with revenue growth rates projected at 31.9%, 32.8%, and 24.6% for the years 2023 to 2025 [17][24]. - The estimated fair value of the stock is set at 92.84 CNY, based on comparable company valuations [24].