CSB(SZ:300718) Southwest Securities·2024-04-26 09:00Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next six months [1]. Core Insights - The company reported a revenue of 1.11 billion yuan in 2023, a year-on-year increase of 3.2%, and a net profit attributable to shareholders of 240 million yuan, which represents a significant year-on-year growth of 137.4% [1][2]. - In Q1 2024, the company achieved a revenue of 280 million yuan, up 6.9% year-on-year, with a net profit of 52 million yuan, reflecting a 1.3% increase year-on-year [1]. - The automotive sector showed strong order performance, contributing to stable overall revenue growth and a notable increase in gross margin, which reached 35.8% in 2023, up 6.4 percentage points from the previous year [1][2]. - The company is a leader in self-lubricating bearings in China, with significant growth potential across multiple sectors, particularly in automotive and engineering machinery [3]. Summary by Sections Financial Performance - The company maintained a stable expense ratio of 11.0% in 2023, a slight decrease of 0.2 percentage points year-on-year. In Q1 2024, the expense ratio was 11.9%, down 2.3 percentage points year-on-year [2]. - The net profit margin for 2023 was 21.9%, an increase of 12.4 percentage points year-on-year, primarily due to improved gross margins and a positive shift in fair value changes [2]. Market Position and Growth Potential - The global bearing market was valued at approximately 130.2 billion USD in 2022, with self-lubricating bearings having significant growth potential due to their ability to replace traditional rolling bearings [3]. - The company has established stable partnerships with leading clients in the automotive and engineering machinery sectors, including Caterpillar and Volvo, which positions it well for future growth as these industries recover [3]. - The wind power industry presents additional opportunities, with the company collaborating with major players to develop sliding bearing solutions, potentially creating a second growth curve [3]. Profit Forecast and Investment Recommendations - The company is projected to achieve net profits of 280 million yuan, 340 million yuan, and 410 million yuan for the years 2024, 2025, and 2026, respectively, indicating a compound annual growth rate of 19% over the next three years [3].