Wanma Tech(SZ:300698)2024-06-02 01:30Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of its stock [6]. Core Views - The company's profitability is expected to improve significantly due to the rapid growth of its connected vehicle business, which is anticipated to expand its profit margins [1][37]. - The integration of intelligent computing and connected vehicle services is projected to be a key driver for future revenue and profit growth [1][6]. - The company has established a strong position in the connected vehicle market, benefiting from the increasing penetration of smart and connected vehicles in China [1][6]. Summary by Sections Company Overview - The company has been deeply involved in the communication industry for over 20 years, gradually expanding its business matrix to include medical and connected vehicle sectors [36]. - Since 2019, the company has benefited from the construction of data centers and the rollout of 5G technology, leading to steady growth in revenue quality [1][37]. - The establishment of subsidiaries like Youka Technology has allowed the company to enter the connected vehicle market, with over 8.1 million users connected by September 2023 [36][37]. Connected Vehicle Business Development - The connected vehicle business is experiencing rapid growth, with the market penetration rate expected to exceed 75% as smart connected vehicles proliferate [1][6]. - The company has a competitive edge due to its self-developed intelligent driving toolchain and the increasing demand for smart vehicle solutions [1][6]. - The connected vehicle revenue is projected to reach 1.78 billion yuan in 2023, with a gross margin of 66.51%, significantly contributing to the overall profitability of the company [1][37]. Financial Forecast and Investment Recommendations - The company is expected to achieve revenues of 609.4 million yuan, 831.3 million yuan, and 1.318 billion yuan for the years 2024, 2025, and 2026, respectively, with year-on-year growth rates of 17.04%, 36.41%, and 58.58% [1][31]. - The earnings per share (EPS) are forecasted to be 0.96 yuan, 1.51 yuan, and 2.34 yuan for the same years, with corresponding price-to-earnings (PE) ratios of 37.55x, 24.04x, and 15.48x [1][31]. - The report emphasizes the company's leading position in the domestic market and the potential for revenue and profit growth through the integration of intelligent computing and connected vehicle services [1][6].