Huarui Precision(SH:688059) Southwest Securities·2024-02-26 16:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected increase in stock price relative to the market index over the next six months [8][29]. Core Views - The chairman's full subscription to the company's private placement reflects confidence in its future development [15]. - The company is expected to benefit from a recovery in demand, with projected net profits of 160 million, 210 million, and 300 million yuan for 2023-2025, representing a compound annual growth rate of 22% [29]. - The report emphasizes the importance of high-end products, direct sales, and overseas market expansion as key drivers for the company's and industry's healthy development [16]. Financial Summary - Revenue is projected to grow from 601.64 million yuan in 2022 to 1.30843 billion yuan in 2025, with growth rates of 23.93%, 32.39%, 29.40%, and 26.94% respectively [10]. - Net profit attributable to the parent company is expected to increase from 165.92 million yuan in 2022 to 303.99 million yuan in 2025, with growth rates of 2.20%, -5.34%, 32.70%, and 45.85% [10]. - Earnings per share (EPS) are forecasted to rise from 2.68 yuan in 2022 to 4.91 yuan in 2025 [10]. - The return on equity (ROE) is projected to improve from 14.89% in 2022 to 19.35% in 2025 [10]. Market Dynamics - The report notes that the domestic tool industry is expected to experience a turnaround as the inventory cycle approaches its end, leading to increased demand [9]. - The overseas tool market is four times the size of the domestic market, and its contribution to growth is anticipated to become significant post-2024 [9].