XUSHENG(SH:603305) Guotai Junan Securities·2024-04-30 01:32Investment Rating - The report maintains a "Buy" rating for the company, with a target price adjusted to 16.29 yuan from the previous 25.52 yuan [2][6]. Core Views - The global trend towards automotive lightweighting is expected to increase the demand for aluminum alloy components, and the company is actively building a global service system to benefit from this trend [2][6]. - The company is facing pressure on performance due to intensified industry competition, which has led to a downward adjustment in earnings forecasts [2][6]. Summary by Relevant Sections Financial Performance - For 2023, the company is projected to achieve revenue of 48.3 billion yuan, a year-on-year increase of 8.5%, with a net profit attributable to shareholders of 7.1 billion yuan, up 1.8% year-on-year [2][6]. - The Q1 revenue was 11.4 billion yuan, down 2.9% year-on-year and down 9.5% quarter-on-quarter, with a net profit of 1.6 billion yuan, down 18.5% year-on-year [2][6]. - The company’s EPS forecast for 2023 is adjusted to 0.89 yuan, with further projections of 1.07 yuan for 2024 and 1.37 yuan for 2026 [2][6]. Cost and Margin Analysis - The gross margin for Q1 2023 was 20.9%, a decrease of 5.4 percentage points year-on-year, while the company is expected to see improvements in gross margin in Q4 2023 [2][6]. - The report indicates that the company is experiencing a significant increase in expense ratios, which has impacted overall profitability [2][6]. Strategic Initiatives - The company is advancing the construction of a manufacturing base in Mexico, which is anticipated to enhance the flexibility of its global supply chain and help expand its customer base in North America [2][6]. - The report highlights the company's efforts to optimize its customer structure and secure new contracts in the lightweight automotive sector [2][6]. Valuation Metrics - The company’s current market capitalization is approximately 12.72 billion yuan, with a PE ratio of 17.75 for 2023 and projected to decrease to 14.99 for 2024 [2][6]. - The report notes that the company’s net asset return rate is expected to be 11.4% in 2023, with a slight increase projected for subsequent years [2][6].