Azure(SZ:002245) Southwest Securities·2024-05-03 03:32Investment Rating - The report maintains a "Hold" rating for the company, considering the short-term demand remains low [1][25]. Core Views - The lithium battery industry is gradually recovering, with high-rate battery applications expanding rapidly, leading to expected high growth in demand [1]. - The company is projected to achieve a net profit attributable to shareholders of 442 million, 554 million, and 680 million yuan for the years 2024, 2025, and 2026 respectively [1][26]. - The company’s revenue for 2023 is reported at 5.22 billion yuan, a decline of 16.92% year-on-year, while the first quarter of 2024 shows a revenue increase of 46.77% year-on-year [25][26]. Financial Forecasts - Revenue and net profit forecasts for the company are as follows: - 2024E Revenue: 6.48 billion yuan, Net Profit: 442 million yuan - 2025E Revenue: 7.78 billion yuan, Net Profit: 554 million yuan - 2026E Revenue: 9.73 billion yuan, Net Profit: 680 million yuan [2][17]. - The company’s earnings per share (EPS) are expected to rise from 0.12 yuan in 2023 to 0.59 yuan in 2026 [2][17]. - The return on equity (ROE) is projected to improve from 2.95% in 2023 to 8.71% in 2026 [2][17]. Business Segments - The lithium battery segment is expected to recover, with sales projected to reach 400 million units by 2024, following a decline in previous years due to high inventory levels [26]. - The LED business is anticipated to maintain stability, with a projected profit of 50 million yuan for 2024 [13][26]. - The metal logistics business is expected to perform well, with profits exceeding 1.5 billion yuan in 2024 due to expansion in the new energy vehicle parts sector [13][26]. Market Expansion - The company is actively expanding into new application areas such as data center backup power, eVTOL, and AI robotics, which are expected to support overall market capacity growth [3][26]. - The overseas factory construction in Malaysia is progressing, with production expected to start in Q2 2025, which will enhance the company's profitability per unit [26].