KSHG(SH:605333) Yong Xing Zheng Quan·2024-05-07 08:00Investment Rating - The report maintains a "Buy" rating for the company [10][22]. Core Views - The company has shown impressive performance in 2023 and Q1 2024, with revenue growth and profit recovery [5][9]. - The revenue for 2023 reached 4.003 billion yuan, a year-on-year increase of 22%, while the net profit attributable to the parent company was 54 million yuan, up 32% year-on-year [9]. - In Q1 2024, the company achieved a revenue of 1.533 billion yuan, a significant year-on-year increase of 134%, and a net profit of 101 million yuan, up 505% year-on-year [9]. - The growth in revenue is driven by increased demand from major clients such as Seres and Li Auto, with total sales for these clients in 2023 and Q1 2024 showing year-on-year increases of 13% and 18%, respectively [9]. - The company's gross margin improved to approximately 12.9% in 2023, up 1.6 percentage points year-on-year, and net margin increased to 1.4%, up 0.1 percentage points year-on-year [9]. - The report highlights a clear growth path driven by client expansion, capacity utilization, and technological advancements [9]. Summary by Sections Financial Performance - Revenue projections for 2024 to 2026 are approximately 7.495 billion, 10.446 billion, and 13.028 billion yuan, representing year-on-year growth rates of 87%, 39%, and 25% respectively [9]. - Net profit forecasts for the same period are approximately 448 million, 647 million, and 840 million yuan, with year-on-year growth rates of 728.6%, 44.3%, and 29.9% respectively [9]. - The earnings per share (EPS) are projected to be 1.03, 1.48, and 1.92 yuan for 2024, 2025, and 2026 respectively [9]. Market Position and Client Base - The report notes that the market share of domestic passenger cars reached 56% in 2023, an increase of 6.1 percentage points year-on-year [9]. - The company is positioned to benefit from the rise of domestic automotive brands, supported by its competitive advantages in technology, manufacturing, and service [9]. Capacity and Technological Development - The company plans to expand its production capacity with new facilities in Tianjin, following expansions in Suzhou and Chongqing [9]. - Technological innovations, such as integrated high-voltage connectors and the use of aluminum instead of copper, are expected to enhance cost structure and profitability [9].