Hongfa(SH:600885) Soochow Securities·2024-04-25 07:30Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's Q1 2024 performance met market expectations, with revenue increasing by 5.79% year-on-year to 3.453 billion yuan and net profit rising by 7.76% to 356 million yuan [3] - The company is expected to benefit from strong demand in the electric vehicle, power, and automotive sectors, projecting over 20% year-on-year growth in these areas [3] - Inventory turnover has improved significantly, although cash flow from operating activities saw a substantial decline [3] Financial Forecast and Valuation - The forecast for net profit attributable to the parent company for 2024-2026 is 1.61 billion, 1.84 billion, and 2.10 billion yuan, respectively, with year-on-year growth rates of 15%, 15%, and 14% [4] - The target price is set at 38.5 yuan, based on a 25x PE ratio for 2024 [4] - The company's total revenue is projected to reach 14.304 billion yuan in 2024, with a year-on-year growth of 10.63% [2][4] Market Data - The closing price is 28.12 yuan, with a market capitalization of approximately 29.32 billion yuan [6] - The price-to-earnings ratio (P/E) is currently 21.05 [10] Basic Data - The company's net asset value per share is 8.01 yuan, with a debt-to-asset ratio of 36.23% [7]