KSHG(SH:605333) Southwest Securities·2024-04-08 16:00Investment Rating - The report assigns a "Buy" rating for the company with a target price of 31.85 CNY over the next six months [28]. Core Insights - The electric and intelligent transformation is driving growth in the wiring harness industry, with the average single vehicle value for new energy vehicles exceeding 5000 CNY, significantly higher than the 3000 CNY for traditional fuel vehicles [1][19]. - The domestic wiring harness market is expected to reach 104.8 billion CNY by 2025, with a CAGR of 14.1% over three years [1][67]. - The company is positioned to benefit from the increasing demand for high-voltage wiring harnesses due to the rise of electric vehicles and the growing complexity of automotive electronics [20][42]. Financial Performance - The company's revenue for 2022 was 3.278 billion CNY, with a growth rate of 33.91%. The projected revenue for 2023 is 3.773 billion CNY, reflecting a growth rate of 15.09% [2]. - The net profit attributable to the parent company for 2022 was 41.07 million CNY, with an astonishing growth rate of 3988.03%. The forecast for 2023 is 44.41 million CNY, an increase of 8.14% [2]. - The earnings per share (EPS) are projected to rise from 0.09 CNY in 2022 to 0.91 CNY in 2024, indicating significant growth potential [2]. Industry Analysis - The wiring harness market is fragmented, with strict supplier qualifications leading to a competitive environment where superior companies are likely to gain market share [1][25]. - The shift towards lightweight materials, such as aluminum replacing copper, is becoming a trend in the industry to enhance fuel efficiency and reduce vehicle weight [45][46]. - The report highlights the increasing importance of high-voltage wiring harnesses in electric vehicles, which require enhanced electrical and mechanical properties compared to traditional vehicles [42][19]. Company Overview - The company, established in 1997 and listed in 2020, specializes in the research, production, and sales of automotive high and low voltage wiring harnesses [9][34]. - The company has a diverse customer base, including both domestic and joint venture automotive manufacturers, with a significant portion of revenue coming from high-voltage wiring harnesses for new energy vehicles [34][72]. - The company is actively transitioning from a labor-intensive model to an intelligent manufacturing model, leveraging automation and smart systems to improve efficiency and product quality [80][57].