WONLY(SH:605268) Guotai Junan Securities·2024-05-14 02:02Investment Rating - The investment rating for Wangli Security (605268) is "Accumulate" with a target price of 10.80 CNY, down from the previous target of 12.16 CNY [1][4]. Core Insights - The company is expected to achieve stable growth in performance due to its focus on smart grinding products and the optimization of its product structure, which will enhance profitability as production capacity is released [1]. - The engineering channel has shown impressive growth, with revenue from this segment increasing by 61.07% year-on-year, supported by real estate supply-side policies that bolster sales of security doors and smart locks [1]. - The company aims for a 30% increase in annual revenue and a 331% increase in net profit attributable to shareholders for 2024, reflecting strong confidence in its development [1]. Summary by Relevant Sections Financial Forecast - Total revenue is projected to grow from 3,044 million CNY in 2023 to 3,958 million CNY in 2024, with a significant increase in net profit from 237 million CNY in 2023 to 380 million CNY in 2024 [2]. - The gross profit margin is expected to improve significantly, with the company focusing on cost control and product innovation [1][2]. Profitability Metrics - The operating profit margin is forecasted to rise from 7.3% in 2023 to 7.7% in 2024, while the return on equity (ROE) is expected to increase from 13.1% in 2023 to 16.0% in 2024 [2][4]. - The company is projected to achieve an EPS of 0.54 CNY in 2024, up from 0.12 CNY in 2023 [2]. Market Position - Wangli Security is positioned as a leader in the security door and smart lock market, with a competitive valuation based on a PE ratio of 20 times for 2024, compared to an average of 17 times for comparable companies [4]. - The company has established strong strategic partnerships with major domestic real estate firms, enhancing its market presence [1].