Core Viewpoint - The automotive synthetic leather industry is evolving with a shift from traditional materials like PVC to more advanced options such as PU and ultra-fine microfiber, driven by consumer demand for comfort, aesthetics, and sustainability [2][3][4]. Industry Current Status - The automotive synthetic leather has undergone three development stages: reliance on genuine leather, coexistence with PVC synthetic leather, and the current trend of replacing PVC with PU and ultra-fine leather due to PVC's shortcomings [2]. - In luxury and high-end vehicles, genuine leather remains irreplaceable, while PU synthetic leather is becoming the mainstream alternative in mid-range vehicles due to its cost-effectiveness and comfort [3][4]. Product Types and Applications - PVC synthetic leather is widely used in economical models and non-skin-contact areas due to its excellent water resistance and processing flexibility, despite lower comfort and breathability compared to PU and genuine leather [4]. - TPO synthetic leather is gaining popularity in high-temperature and scratch-resistant areas due to its recyclability and lightweight properties, although it struggles to compete in soft-touch applications [4]. - Ultra-fine microfiber leather is emerging as a bridge between genuine leather and synthetic options, offering durability and comfort for high-contact areas in smart cabins [5]. Environmental and Technological Trends - The industry is focusing on eco-friendly production methods, with a shift towards water-based and solvent-free materials to reduce organic solvent pollution [6]. - High-end vehicles are increasingly integrating smart features into leather surfaces, such as temperature regulation and touch response, enhancing functionality without compromising aesthetics [6]. Market Size and Growth - The global automotive synthetic leather market is projected to reach approximately 26.2 billion yuan in sales by 2024, with an expected CAGR of 4.75% from 2025 to 2031 [10]. - China is the largest consumer market, accounting for about 41.78% of the global market share in 2024, with significant growth anticipated in the coming years [10][11]. Key Manufacturers - Major global manufacturers in the automotive synthetic leather sector include Continental, Sealy, Republic Leather, Gattuso, and Vulcaflex, collectively holding a significant market share [13].

Investment Rating - The report assigns an "Outperform" rating to the company with a target price of RMB 13.08, compared to the current price of RMB 9.96 [1][6][13]. Core Insights - The company is expected to benefit from improved wind conditions, with onshore and offshore wind utilization hours increasing by 152 and 421 hours year-on-year, respectively, leading to a positive outlook for performance recovery [1][6][13]. - For 2024, the company is projected to achieve revenue of RMB 14.56 billion, a slight decrease of 0.9% year-on-year, while net profit attributable to shareholders is expected to rise by 6.5% to RMB 2.79 billion [6][13]. - The first quarter of 2025 shows promising results with revenue of RMB 3.1 billion, up 0.3% year-on-year, and net profit attributable to shareholders increasing by 42.8% to RMB 750 million, driven by strong wind resources [6][13]. Financial Summary - The financial summary indicates that the company’s revenue is projected to decline slightly in 2024 but is expected to grow significantly in the following years, reaching RMB 18.44 billion by 2027, representing a growth of 17.6% [4][7]. - Net profit attributable to shareholders is forecasted to increase from RMB 2.79 billion in 2024 to RMB 3.73 billion in 2027, reflecting a compound annual growth rate of approximately 13.1% [4][7]. - The earnings per share (EPS) is expected to rise from RMB 1.00 in 2024 to RMB 1.34 in 2027, indicating a positive trend in profitability [4][7]. Future Growth Potential - The company has a robust pipeline of future projects, including a combined heat and power (CHP) project and offshore wind projects, which are expected to contribute significantly to net profits in 2026 and 2027 [6][14]. - The anticipated internal rates of return (IRR) for the CHP projects are 12.55% and 17.73%, indicating strong potential for profitability [6][14]. - The company plans to initiate a mid-term dividend of no less than 10% in 2025, reflecting a commitment to shareholder returns while pursuing growth [6][14].

Investment Rating - The report assigns an "Outperform" rating to the company with a target price of RMB 13.08, compared to the current price of RMB 9.96 [1][6][13]. Core Insights - The company is expected to see a recovery in performance due to improved wind conditions, with onshore and offshore wind utilization hours increasing by 152 and 421 hours year-on-year, respectively [1][6][13]. - For 2024, the company is projected to achieve revenue of RMB 14.56 billion, a slight decrease of 0.9% year-on-year, and a net profit attributable to shareholders of RMB 2.79 billion, an increase of 6.5% year-on-year [6][13]. - The first quarter of 2025 shows promising results with revenue of RMB 3.1 billion, up 0.3% year-on-year, and a net profit of RMB 750 million, up 42.8% year-on-year, driven by strong wind resources [6][13]. Financial Summary - The financial summary indicates that the company’s revenue is expected to grow from RMB 14.56 billion in 2024 to RMB 18.44 billion by 2027, reflecting a compound annual growth rate (CAGR) of 17.6% [4][7]. - Net profit attributable to shareholders is projected to increase from RMB 2.79 billion in 2024 to RMB 3.73 billion in 2027, with a CAGR of 13.1% [4][7]. - The earnings per share (EPS) is expected to rise from RMB 1.00 in 2024 to RMB 1.34 in 2027 [4][7]. Future Growth Potential - The company has a robust pipeline of future projects, including a combined heat and power (CHP) project with an expected internal rate of return (IRR) of 12.55% for Phase I and 17.73% for Phase II, projected to commence in 2026 and 2027, respectively [6][14]. - The offshore wind project in Changle J Zone is expected to be operational by early 2027, with an IRR of 5.03% [6][14]. - The company plans to initiate a mid-term dividend of no less than 10% in 2025, indicating a commitment to shareholder returns while pursuing growth [6][14].