XZB(SH:603040) Southwest Securities·2024-05-13 23:30Investment Rating - The report maintains a "Buy" rating for the company with a target price of 28.08 CNY over the next six months [1][4]. Core Insights - The company reported a revenue of 580 million CNY in 2023, representing a year-on-year increase of 10.7%, and a net profit attributable to shareholders of 180 million CNY, up 18.4% year-on-year [1]. - The company achieved a gross margin of 53.3% in 2023, slightly down by 1.5 percentage points year-on-year, with improvements in specific product lines [1]. - The company has successfully expanded its overseas market, with overseas revenue reaching 200 million CNY, a 35.5% increase year-on-year, contributing significantly to overall growth [1]. - The company is actively developing new products and expanding its precision component offerings across various automotive applications, which is expected to drive future growth [1]. Summary by Sections Financial Performance - In Q4 2023, the company recorded a revenue of 160 million CNY, down 6.9% year-on-year but up 7.4% quarter-on-quarter, with a net profit of 50 million CNY, reflecting a 13.9% increase year-on-year [1]. - For Q1 2024, the company reported a revenue of 140 million CNY, a 7.6% increase year-on-year, but a decrease of 11.8% quarter-on-quarter, with a net profit of 50 million CNY, up 1.2% year-on-year [1]. Product Segmentation - Revenue from valve drive precision components was 410 million CNY, up 10.0% year-on-year, while valve group precision components generated 90 million CNY, up 10.7% year-on-year [1]. - Other businesses, including precision components and cold forging processing, contributed 80 million CNY, a 12.6% increase year-on-year [1]. Market Expansion - The company has secured new projects with major clients such as Volkswagen and BYD, establishing a solid foundation for future revenue growth [1]. - The overseas subsidiaries, particularly in Europe and Mexico, have shown significant revenue growth, with increases of 45.2% and 93.1% respectively [1]. Future Outlook - The company forecasts net profits of 210 million CNY, 260 million CNY, and 290 million CNY for 2024, 2025, and 2026 respectively, with a compound annual growth rate of 16.7% from 2024 to 2026 [1][11]. - The report anticipates a continued improvement in gross margins as the company focuses on reducing waste in production processes [1].