Core Viewpoint - Huajin Securities initiates coverage of Del Corporation with a "Buy" rating, highlighting the company's robust traditional automotive parts business and breakthroughs in solid-state battery technology, unlocking a "second growth curve" in the new energy sector [1][4] Group 1: Traditional Business Strength - Del Corporation has established a global R&D layout deeply embedded in the European and American markets, with overseas R&D bases in the USA, Mexico, Germany, and Spain, expecting over 70% of overseas revenue in 2024 and the first half of 2025 [1][4] - The company has formed long-term strategic partnerships with major global automakers such as BMW, Audi, Volkswagen, and Ford, further solidifying its industry-leading position [1][4] Group 2: Core Product Performance - Del Corporation leads globally in NVH noise reduction, thermal insulation, and lightweighting, with over 20 years of technology accumulation in electric motors, pumps, and mechanical pumps [2][5] - Revenue forecasts for noise reduction, thermal insulation, and lightweight products are projected to reach 3.517 billion yuan, 3.833 billion yuan, and 4.217 billion yuan from 2025 to 2027, respectively [2][5] - The company’s traditional business growth provides sufficient cash flow and resources for new business development [2][5] Group 3: Profitability and Efficiency - Del Corporation is enhancing profitability through internal optimization and external acquisitions, with a decrease in expense ratios by 3.17 percentage points year-on-year in the first three quarters of 2025 [2][5] - The acquisition of Aizhuo Intelligent Technology's entire equity further improves business layout [2][5] - The company anticipates a more than 130% year-on-year increase in net profit attributable to shareholders and over 260% in net profit excluding non-recurring items for 2025 [2][5] Group 4: Solid-State Battery Development - Del Corporation has been investing in solid-state battery R&D since 2018, with significant upgrades expected in 2025, including the completion of a pilot production line in Shanghai [3][6] - The solid-state battery products have passed rigorous safety tests and obtained UN38.3 international certification, showcasing superior safety and high-temperature resistance [3][6] - The company has signed strategic cooperation agreements with several new energy vehicle manufacturers, accelerating the commercialization process [3][6] Group 5: Financial Projections - Huajin Securities forecasts Del Corporation's revenue to reach 4.953 billion yuan, 5.400 billion yuan, and 5.940 billion yuan from 2025 to 2027, with net profits of 157 million yuan, 222 million yuan, and 297 million yuan, respectively [4][7] - The projected EPS for the same period is 0.92 yuan/share, 1.31 yuan/share, and 1.75 yuan/share, with corresponding PE ratios of 37x, 26x, and 20x, indicating high certainty in earnings growth and ample valuation recovery potential [4][7]

Core Viewpoint - Del Corporation has experienced significant fluctuations in its market performance since its listing in June 2015, with a current market value of 4.725 billion yuan, reflecting a recovery in its operational performance in recent years [1][3]. Business Overview - The main business of Del Corporation includes the research, production, and sales of automotive steering pumps and gear pumps, with the highest revenue contribution coming from noise reduction, thermal insulation, and lightweight products, accounting for 70.83% of total revenue, followed by motor, electric pump, and mechanical pump products at 26.84% [3]. Financial Performance - In 2015, the year of its listing, Del Corporation achieved a net profit attributable to shareholders of 138 million yuan, while the latest complete fiscal year of 2024 shows a net profit of 32 million yuan, indicating a cumulative profit decline of 76.54% over the decade [3]. - The company has recorded two years of losses since its listing, with profit growth years reaching six, representing 60.0% of the time [3]. - Revenue has shown steady growth, increasing from 3.386 billion yuan in 2020 to 4.513 billion yuan in 2024, while the net profit improved from a loss of 423 million yuan in 2020 to a profit of 32 million yuan in 2024, indicating a gradual recovery in profitability [4]. Market Capitalization - Since its listing, Del Corporation's market value has increased by 0.14 times, peaking at 10.68 billion yuan on December 1, 2015, with a corresponding stock price of 106.8 yuan. As of June 11, the stock price is 31.3 yuan, with a market value of 4.725 billion yuan, representing a decrease of 5.955 billion yuan from its peak, or a 55.75% market value evaporation [6].

Core Insights - The company, Del Automotive Parts Co., Ltd., reported significant growth in net profit and operating income for the year 2024, with a notable increase in profitability driven by cost control and market expansion efforts, particularly in the new energy vehicle sector [3][4]. Revenue - In 2024, the company achieved operating revenue of 4,513,484,787.40 yuan, a 4.98% increase from 4,299,433,799.79 yuan in 2023 [2]. - Revenue from noise reduction (NVH), thermal insulation, and lightweight products was 3,197,081,661.04 yuan, up 9.78% year-on-year [2]. - Revenue from electric motors, pumps, and mechanical pumps decreased by 4.16% to 1,211,224,089.54 yuan, while revenue from electronic control and automotive electronics fell by 12.54% to 68,474,087.58 yuan [2]. Profitability - The net profit attributable to shareholders was 32,427,524.33 yuan, a 151.73% increase from 12,881,659.17 yuan in 2023 [3]. - The net profit excluding non-recurring items surged by 1553.76% to 26,016,651.06 yuan from 1,573,177.45 yuan in the previous year [3]. Earnings Per Share - Basic earnings per share rose to 0.22 yuan, a 144.44% increase from 0.09 yuan in 2023 [4]. - The non-recurring earnings per share also saw significant growth, reflecting the overall improvement in operational efficiency [4]. Expenses - Sales expenses remained stable at 68,387,910.74 yuan, a slight increase of 0.59% from 67,988,758.85 yuan in 2023 [5]. - Management expenses increased by 3.25% to 508,280,000.35 yuan, primarily due to adjustments in the subsidiary Carcoustics [5]. - Financial expenses decreased significantly by 27.04% to 57,923,726.56 yuan, indicating improved debt management [5]. Research and Development - R&D expenses were 217,372,975.87 yuan, accounting for 4.82% of operating revenue, with a slight decrease from the previous year [6]. - The number of R&D personnel decreased by 14.29% to 360, reflecting a restructuring aimed at improving efficiency [6]. Cash Flow - Net cash flow from operating activities increased by 31.96% to 474,511,230.73 yuan, indicating enhanced cash generation capabilities [7]. - Cash flow from investing activities was negative at -143,147,313.87 yuan, a decline of 35.50% from the previous year [7]. - Cash flow from financing activities also turned negative at -606,271,633.09 yuan, a significant drop of 196.69%, primarily due to increased debt repayments [7].