XINGYE TECH.(SZ:002674) Guotai Junan Securities·2024-05-06 02:33Investment Rating - The report maintains a "Buy" rating for Xingye Technology with a target price of 14.78 CNY, reflecting a price-to-earnings (PE) ratio of 16 times for 2024, which is above the industry average [2][3]. Core Views - The company's performance in 2023 and Q1 2024 met expectations, with significant growth in the automotive interior business, which is expected to continue in 2024. The leather main business is projected to grow steadily [2]. - The report highlights a strong revenue increase of 35.8% and a net profit increase of 23.7% in 2023, with adjusted net profit growth of 31.4% after excluding equity incentive costs [2]. - The automotive interior segment saw a remarkable revenue growth of 94.21% in 2023, primarily driven by contributions from major clients [2]. Financial Summary - Revenue for 2023 was 2.7 billion CNY, with a projected revenue of 3.145 billion CNY for 2024, representing a 16% growth [2][4]. - The net profit attributable to shareholders for 2023 was 186 million CNY, with an expected increase to 263 million CNY in 2024, indicating a 41% growth [2][4]. - Earnings per share (EPS) are forecasted to be 0.90 CNY for 2024, up from 0.64 CNY in 2023 [2][4]. Business Segment Performance - The leather main business generated 1.867 billion CNY in revenue in 2023, reflecting a year-on-year growth of 19.59% [2]. - The automotive interior business achieved 599 million CNY in revenue in 2023, with a gross margin increase of 6.1 percentage points to 29.9% due to economies of scale [2]. - The collagen from second-layer leather generated 134 million CNY in revenue, marking a significant growth of 165.52% [2]. Future Outlook - The automotive interior business is expected to maintain high growth in 2024, supported by positive order guidance from existing clients and ongoing efforts to acquire new customers [2]. - The leather main business is anticipated to achieve double-digit growth in 2024, aided by the construction of a new factory in Indonesia expected to commence production in Q3 [2].