Investment Rating - The report assigns a rating of "Buy" for Huaxi Securities Co., Ltd. [2] Core Insights - The company is the leading brand in the automotive service chain, with a significant increase in profitability. As of the end of 2023, the company operates 5,909 Tuhu factory stores across over 300 cities, with a customer repurchase rate of 57% in Q1 2023, indicating strong customer loyalty [2][16] - The expansion of stores has driven steady revenue growth, with the number of Tuhu factory stores increasing from 1,423 in 2019 to 5,909 in 2023, representing a CAGR of 32.94%. Revenue grew from 7 billion yuan in 2019 to 13.6 billion yuan in 2023, with a CAGR of 17.9% [2][3] - Adjusted net profit turned positive for the first time in 2023, reaching 481 million yuan, attributed to improved profit margins from scale and standardization [2][3] Summary by Sections 1. Automotive Service Standardization Leader - The company is recognized as the first brand in the automotive service chain, with Tencent as its largest shareholder [16][51] - The business model includes a mix of self-operated and franchise stores, with a total of 5,909 Tuhu factory stores by the end of 2023, marking a significant increase from previous years [18][50] 2. Future Market Potential - The automotive service market in China is expected to exceed 1 trillion yuan, with significant growth potential for the IAM (Independent Aftermarket) sector [2][4] - The market's chain rate is currently low at 7.8%, indicating substantial room for growth compared to the U.S. market [2][4] 3. Competitive Advantages - The company benefits from strong traffic and standardization, with over 70% of revenue coming from online orders, supported by a partnership with Tencent [2][3] - The company has established a robust supply chain, enhancing its bargaining power and improving profit margins [2][3] 4. Financial Forecast and Investment Recommendations - Revenue projections for 2024-2026 are estimated at 15.74 billion, 17.60 billion, and 19.38 billion yuan, with corresponding net profits of 810 million, 1.34 billion, and 1.93 billion yuan [2][3] - The report suggests a target price of 25.05 HKD per share, with a corresponding PE ratio of 24, 14, and 10 for the years 2024-2026 [2][3]
途虎-Ｗ：IAM市场龙头，盈利能力持续提升