KSHG(SH:605333) Guoxin Securities·2024-06-16 06:02Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) with a reasonable valuation range of 29.60 - 33.82 CNY per share, while the closing price is 28.12 CNY [1][3]. Core Views - The report emphasizes the future of the automotive industry from a data flow perspective, highlighting the importance of data acquisition, transmission, computation, and application in automotive intelligence. The company, Hu Guang Co., Ltd., specializes in automotive wiring harnesses, which are crucial for data transmission [2][43]. - The automotive wiring harness market is expected to grow significantly due to the trends of electrification and intelligence in vehicles. The report estimates that the global market for traditional low-voltage and high-voltage wiring harnesses will exceed 330 billion CNY by 2025, while the high-speed wiring harness market will exceed 50 billion CNY [2][6]. Summary by Sections Company Overview - Hu Guang Co., Ltd. is a leading domestic manufacturer of automotive wiring harnesses, benefiting from the increasing demand from downstream customers. The company reported a revenue of 4 billion CNY in 2023, a year-on-year increase of 22%, with a net profit of 54.1 million CNY, up 233% year-on-year [5][44]. Financial Analysis - The company’s revenue is projected to grow significantly, with estimates of 7.1 billion CNY in 2024, 9 billion CNY in 2025, and 11 billion CNY in 2026. The net profit is expected to reach 462 million CNY in 2024, 634 million CNY in 2025, and 836 million CNY in 2026 [4][6]. Industry Trends - The report discusses the increasing value of wiring harnesses per vehicle due to the rise of electric and intelligent vehicles. The estimated value for traditional low-voltage wiring harnesses is 2500-3500 CNY per vehicle, while high-voltage and high-speed wiring harnesses are expected to add significant value as well [2][6]. Competitive Landscape - The domestic automotive wiring harness market is dominated by foreign companies such as Yazaki, Sumitomo, and Leoni, with Hu Guang holding a market share of approximately 3-4%. The company is one of the few domestic manufacturers that have long-term partnerships with joint venture automakers and has been actively expanding its customer base to include new energy vehicle manufacturers [2][6][32].