KLM(SH:600686) Soochow Securities·2024-05-01 05:30Investment Rating - The report maintains a "Buy" rating for the company [3][5]. Core Views - The core catalyst for the current upcycle in the bus industry is driven by the significant increase in export bus sales, with the company being a leading player in the domestic market. In 2023, the company's foreign revenue reached 9.2 billion yuan, a year-on-year increase of 63%, driven by a 26% increase in export volume and a 29% increase in export unit price [2][3]. - The company's profitability is expected to improve significantly, with projected net profits for 2024 and 2025 at 305 million yuan and 626 million yuan respectively, and a substantial increase to 891 million yuan in 2026, reflecting year-on-year growth rates of 306%, 105%, and 42% [3][5]. Financial Forecasts - Total revenue is forecasted to be 19.4 billion yuan in 2023, with a year-on-year growth of 6.36%. The revenue is expected to reach 20.973 billion yuan in 2024, 23.754 billion yuan in 2025, and 26.757 billion yuan in 2026, with respective growth rates of 8.11%, 13.26%, and 12.64% [3][8]. - The company's gross margin is projected to improve, with 2023 gross margins at 12.7%, compared to 11.6% in 2022, driven by lower raw material costs and improved internal management [13][3]. Profitability Metrics - The report indicates a significant recovery in net profit margins, with the net profit margin for Q1 2024 at 0.44%, higher than the full-year 2023 margin of 0.39% [6][3]. - The earnings per share (EPS) is expected to increase from 0.10 yuan in 2023 to 1.24 yuan in 2026, reflecting a strong recovery in profitability [3][8].