SHUANGHUAN COMPANY(002472) 国元证券·2024-04-14 16:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 28.13 yuan, representing a potential upside from the current price of 21.60 yuan [4] Core Views - The company achieved robust growth in 2023, with revenue increasing by 18.08% YoY to 8.074 billion yuan and net profit attributable to shareholders surging 40.26% YoY to 816 million yuan [2] - Gross margin and net margin improved to 22.24% and 10.33% respectively, up 1.16 and 1.76 percentage points from the previous year [2] - The company is expected to maintain strong growth momentum, with projected net profit attributable to shareholders of 1.044 billion yuan, 1.366 billion yuan, and 1.664 billion yuan for 2024-2026, representing YoY growth of 27.84%, 30.91%, and 21.77% respectively [2] Business Performance Traditional Automotive Business - The traditional automotive gear business achieved revenue of 4.223 billion yuan in 2023, up 15.66% YoY, outperforming the industry's -0.65% growth [2] - The company demonstrated solid business fundamentals with traditional vehicle gear revenue reaching 2 billion yuan, a 15.15% increase [2] New Energy Vehicle Business - New energy vehicle gear revenue grew 16.46% YoY to 2.229 billion yuan, slightly below the pure EV market growth of 24.61% due to inventory reduction in the first half of 2023 [2] - The low base effect from 2023 is expected to benefit future growth [2] Emerging Businesses - Commercial vehicle, robotics, and civil gear businesses showed strong growth, with revenues of 880 million yuan, 556 million yuan, and 379 million yuan respectively, representing YoY increases of 71.25%, 45.62%, and 87.47% [2] - The shift from manual to automatic transmissions in commercial vehicles is driving growth, with major clients like ZF continuing to lead the trend [2] - Robotics and civil gear businesses are accelerating through domestic substitution and new customer development, with optimistic prospects due to expanding application scenarios [2] Competitive Advantages - The company maintains high barriers in process technology, primarily serving the mid-to-high-end market [2] - It has successfully diversified its international brand portfolio through partnerships with global Tier 1 suppliers like ZF and Schaeffler [2] - Management efficiency improvements have contributed to rising gross and net margins, with operating cash flow reaching 1.572 billion yuan, nearly double the net profit level [2] Financial Projections - Revenue is expected to grow from 9.522 billion yuan in 2024E to 13.444 billion yuan in 2026E, with YoY growth rates of 17.93%, 20.70%, and 16.97% respectively [3] - EPS is projected to increase from 1.22 yuan in 2024E to 1.95 yuan in 2026E [3] - ROE is forecasted to improve from 11.24% in 2024E to 13.84% in 2026E [3] Valuation - The company's P/E ratio is expected to decline from 17.65x in 2024E to 11.07x in 2026E, indicating potential undervaluation [3] - The target price of 28.13 yuan represents a 30.23% upside from the current price of 21.60 yuan [4]