Kaizhong Precision(002823) 国泰君安·2024-04-23 13:32Investment Rating - The report maintains an Overweight rating for Kaizhong Precision (002823) with a target price of 16.56 CNY, down from the previous target of 17.06 CNY [2][7] - The current stock price is 9.86 CNY, with a 52-week price range of 7.07-13.29 CNY [2][7] Core Views - Kaizhong Precision's performance aligns with expectations, showing significant improvement in profitability, with a 209.54% YoY increase in net profit to 77 million CNY in 2023 [2] - The company's revenue in 2023 reached 3.024 billion CNY, a 13.6% YoY increase, driven by strong demand in the new energy vehicle (NEV) component sector [2] - The NEV component business achieved revenue of 748 million CNY, a 24.2% YoY increase, while the communication sector revenue grew by 48.1% to 241 million CNY [2] - The company's gross margin improved to 14.68%, up by 0.48 percentage points, and net margin increased to 2.54%, up by 1.6 percentage points [2][15] Financial Performance - Revenue Growth: Revenue is expected to grow by 10% in 2024, 16% in 2025, and 14% in 2026, reaching 4.383 billion CNY by 2026 [2][12] - Net Profit Growth: Net profit is projected to grow by 138% in 2024, 49% in 2025, and 18% in 2026, reaching 321 million CNY by 2026 [2][12] - EPS Forecast: EPS is expected to be 0.63 CNY in 2024, 0.94 CNY in 2025, and 1.11 CNY in 2026 [2][12] - Operating Margin: The operating margin is forecasted to improve from 7.1% in 2023 to 9.2% in 2026 [12] Business Highlights - NEV Component Business: The company has successfully expanded into the NEV component market, with products such as busbars, structural parts, and connectors gaining recognition from international clients [2][16] - Technological Advancements: Kaizhong Precision has made breakthroughs in precision metal and plastic molding, high-molecular engineering materials, and intelligent manufacturing, leading to cost reductions and efficiency improvements [2][16] - Client Base: The company has secured projects from leading automakers and renowned enterprises, enhancing its global competitiveness [2][16] Industry Outlook - The NEV market is expected to grow significantly, with global sales projected to increase by 27% in 2024, reaching 17.5 million units [16] - The demand for NEV components, particularly in the battery, motor, and electronic control systems, is expected to rise rapidly, benefiting companies like Kaizhong Precision [16] Valuation - The report values Kaizhong Precision at 26.28x 2024E PE, based on the industry average, resulting in a target price of 16.56 CNY [17] - Comparable companies in the NEV sector, such as Jiaocheng Ultrasonic, Keboda, and Songyuan, have an average PE of 26.28x [17][19]