成本优化蓄势待发，产品扩张初露峥嵘

Investment Rating - The report initiates coverage on Daye Stock with a "Buy" rating, citing the company's strong position in the tire skeleton materials market and its potential for growth in new sectors such as robotics [4] Core Views - Daye Stock is a leader in the domestic tire skeleton materials market, with its main products being bead wire, steel cord, and hose wire. The company has a dominant position in the domestic bead wire production market and has strengthened its steel cord production capacity through the acquisition of Shengtong [3] - The company's profitability rebounded in 2023 due to the stabilization of raw material prices and the gradual recovery of Shengtong's steel cord production capacity. The net profit attributable to the parent company in the first three quarters of 2023 was RMB 105 million, a year-on-year increase of 162.73% [3] - The report forecasts that Daye Stock's revenue will grow steadily from 2023 to 2025, with expected revenues of RMB 5.503 billion, RMB 6.198 billion, and RMB 7.024 billion, respectively. The net profit attributable to the parent company is expected to be RMB 112 million, RMB 192 million, and RMB 358 million for the same periods [4] Industry Analysis - The tire skeleton materials industry is experiencing a recovery in demand, with raw material prices stabilizing and energy prices declining. This has alleviated cost pressures on the industry. The report highlights that the industry still has significant growth potential, particularly as the automotive industry continues to expand [23] - The industry is moving towards large-scale, technological, and low-carbon development, with low-end small-capacity production gradually being phased out. Daye Stock, as a leading player, is expected to further increase its market share [23] Company Strategy - Daye Stock is deploying multiple strategies, including green energy, overseas expansion, and new product development, to seize new growth opportunities. The company has built 77MW of photovoltaic power generation on factory roofs, which accounted for 9.97% of the company's annual electricity consumption in 2022. Additionally, the company is planning to build a wind power plant, which could save over RMB 100 million in electricity costs annually if approved [11] - The company has introduced high-value-added specialty steel products, such as cable-type bead wire, which is used in high-performance car and aircraft tires. Daye Stock is also exploring opportunities in the robotics sector with its specialty steel products for robotic dexterous hands [11] Financial Performance - Daye Stock's revenue has shown steady growth, with a CAGR of 20.91% from 2018 to 2022. The company's revenue in the first three quarters of 2023 was RMB 4.172 billion, a year-on-year increase of 6.91% [36] - The company's profitability improved in 2023, with a net profit attributable to the parent company of RMB 105 million in the first three quarters, a significant increase from the previous year [36] Valuation - The report compares Daye Stock's valuation with three other companies in the industry. The company's current market value corresponds to a 2023 PE of 29.8X, which is slightly higher than the average PE of comparable companies at 25.3X. The higher valuation is justified by the company's strong position in the bead wire market and its potential for growth in new sectors [133]