Yongjin Technology (603995) 国泰君安·2024-05-03 03:32Investment Rating - The report maintains a "Buy" rating for Yongjin Stock (603995) with a target price of CNY 25.53 [6][8] Core Views - Yongjin Stock's Q1 2024 performance met expectations, with revenue increasing by 24.29% YoY to CNY 9.305 billion and net profit attributable to shareholders rising by 30.46% YoY to CNY 122 million [6] - The company's stainless steel cold-rolled sheet sales reached 700,000 tons in Q1 2024, a 47.05% YoY increase [6] - Yongjin Stock's new projects in Zhejiang (195,000 tons) and Guangdong (350,000 tons) commenced production in December 2023 and July 2023 respectively, contributing to capacity expansion [6] - The company plans to achieve stainless steel sales of 3.2 million tons in 2024, with continued production capacity release [6] - The gross profit per ton for stainless steel cold-rolled products may have bottomed out, with Q1 2024 figures showing stabilization [6] Valuation and Financials - The report values Yongjin Stock at 17.7x 2024E PE, slightly higher than the industry average of 14.14x [4] - Net profit attributable to shareholders is forecasted to be CNY 528 million, CNY 627 million, and CNY 715 million for 2024E, 2025E, and 2026E respectively [6] - EPS is projected to be CNY 1.44, CNY 1.71, and CNY 1.95 for 2024E, 2025E, and 2026E respectively [6] - The company's ROE is expected to improve from 8.7% in 2023A to 11.4% in 2026E [6] Industry and Market Position - Yongjin Stock is a leading stainless steel cold-rolled sheet producer, with products covering precision and wide-width cold-rolled stainless steel sheets [8] - The company is compared with industry peers such as Jiuli Special Materials and CITIC Special Steel, with an average PE of 14.14x for 2024E [4] - The stainless steel cold-rolled industry is believed to be in a bottoming phase, with supply-demand imbalances gradually easing [6] Growth Drivers - New titanium and pre-plated nickel strip projects, which started construction in May 2023, are expected to reach trial production by June 2024, diversifying the product portfolio [6] - The company's focus on technological innovation and production process improvement has resulted in 90 patents, including 75 utility model patents [8]