GONGNIU(SH:603195) GF SECURITIES·2024-03-28 16:00Investment Rating - The report assigns a rating of "Buy" for the company [4]. Core Views - The company is a leader in the civil electrical appliance sector with strong profitability, achieving a revenue of 11.607 billion yuan in Q1-3 of 2023, a year-on-year increase of 10.8%, and a net profit of 2.813 billion yuan, up 19.1% year-on-year [2][24]. - The company has a robust product portfolio, particularly in converters and wall switches, with a market share of 77.2% in the socket market, and is expanding its market presence through innovative product offerings and channel strategies [2][24]. - The company benefits from a dual-channel strategy, effectively managing both consumer (C-end) and business (B-end) markets, which enhances its competitive edge [2][24]. - The supply chain management is optimized through centralized procurement and increased automation, leading to cost reductions and efficiency improvements [2][24]. Summary by Sections Company Overview - The company focuses on civil electrical and lighting sectors, continuously innovating its product matrix since its establishment in 1995 [14][17]. - It has expanded its offerings to include wall switches, smart lighting, and new energy charging stations, establishing a sustainable industrial layout [14][17]. Financial Performance - The company has shown steady revenue growth from 7.240 billion yuan in 2017 to 14.081 billion yuan in 2022, with a CAGR of 14.23% [24]. - As of Q3 2023, the company reported a revenue of 11.607 billion yuan and a net profit of 2.813 billion yuan, reflecting strong operational resilience [24][27]. Product and Market Strategy - The company’s main revenue sources are electrical connection products and smart electrical lighting, which together account for nearly 98% of total revenue [27][29]. - The new energy segment has seen rapid growth, with a revenue increase of 195.21% year-on-year in H1 2023 [27][29]. Supply Chain and Operational Efficiency - The company has established a strong supply chain with centralized procurement strategies, leading to cost advantages over competitors [2][24]. - Automation and smart manufacturing processes are being enhanced to improve production efficiency and reduce costs [2][24]. Future Outlook - The company is expected to maintain its leading position in the civil electrical appliance market, with projected net profits of 3.76 billion yuan, 4.33 billion yuan, and 5.01 billion yuan for 2023, 2024, and 2025 respectively [2][4]. - The report suggests a target price of 111.82 yuan per share based on a 23x PE ratio for 2024, indicating potential upside from the current price [4].