EMTEK(SZ:300938) GOLDEN SUN SECURITIES·2024-03-11 16:00Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance in the coming months [63]. Core Insights - The company is positioned in a high-growth sector, with significant expansion plans in both the automotive and military testing markets, which are expected to drive revenue growth [27][30]. - The automotive testing segment is projected to maintain a strong growth trajectory, supported by increasing demand for electric vehicles and the company's established relationships with major automotive manufacturers [15][18]. - The military testing market is anticipated to become a new growth driver, with the company planning to enhance its capabilities and capacity in this area [48]. Summary by Sections 1. Company Overview - The company has a diverse testing portfolio, with a strong focus on automotive and electronic products, and has established itself as a leader in EMC/RF testing in South China [12][13]. 2. Financial Performance - In 2022, the company's total inspection and testing revenue reached 420 million yuan, with a gross margin of 57% [13][36]. - Revenue is expected to grow significantly, with projections of 692 million yuan in 2023, representing a year-on-year increase of 27% [36]. 3. Market Opportunities - The company plans to invest 260 million yuan to expand its electric vehicle testing capacity, which is expected to increase production capacity by 21.6% [46]. - The military testing segment is projected to add 328,000 hours of testing capacity annually, enhancing the company's market position in this area [48]. 4. Growth Drivers - The company anticipates that the automotive testing business will grow by 35% in 2023, driven by the increasing penetration of electric vehicles and the rapid iteration of vehicle models [33]. - The military testing segment is expected to contribute to revenue starting in late 2024 or early 2025, with projected growth rates of 10% to 25% in subsequent years [34]. 5. Profitability and Valuation - The company is expected to maintain a gross margin of approximately 58.6% to 60.6% from 2023 to 2025, with automotive testing margins projected to be higher at around 72.5% [53]. - The earnings per share (EPS) is forecasted to increase from 0.54 yuan in 2022 to 0.72 yuan in 2025, reflecting strong profitability growth [66].