KinLong(SZ:002791) Tianfeng Securities·2024-03-26 16:00Investment Rating - The report maintains a "Buy" rating for the company [8][10]. Core Views - The company has shown signs of performance improvement, with a revenue of 7.802 billion yuan in 2023, a year-on-year increase of 2.0%, and a net profit attributable to shareholders of 324 million yuan, a significant increase of 393.89% [5][8]. - The company is expected to continue expanding its product categories and deepening its market penetration in schools and hospitals, which may lead to improved operational quality [5]. - The decline in raw material prices is anticipated to enhance profitability, with a notable improvement in gross margin from 30.24% in 2022 to 32.3% in 2023 [6][7]. Financial Performance - In 2023, the company's core product, door and window hardware, generated revenue of 3.59 billion yuan, with a gross margin of 40.4%, reflecting a year-on-year increase of 3.95 percentage points [6]. - The company’s total revenue and net profit for 2024 are projected to be 9.034 billion yuan and 427 million yuan, respectively, indicating year-on-year growth rates of 15.79% and 31.91% [9][17]. - The company’s total assets decreased from 10.546 billion yuan in 2022 to 9.824 billion yuan in 2023, while total liabilities also decreased from 5.524 billion yuan to 4.485 billion yuan [23]. Market Position and Strategy - The company has established over 1,000 sales points domestically and internationally, with a sales team of over 6,000 people, and is focusing on digital platforms for both B2B and B2C markets [7]. - The report highlights the company's efforts in digital transformation, including the development of online platforms to enhance customer engagement and sales efficiency [7][14]. Future Outlook - The company is expected to benefit from a potential recovery in the real estate market, which could lead to continued outperformance in its financial results [5][8]. - The report projects a gradual increase in net profit to 635 million yuan by 2026, with a compound annual growth rate of 21.47% from 2023 to 2026 [9][17].