The target price was raised to 37.40 yuan to maintain the company's shareholding rating. The company recently received important orders from major global customers and will accelerate the development of overseas markets, and its performance is expected to continue to grow. The company raised its 2024-2026 EPS forecast to 1.33 (+0.10)/1.70 (+0.11)/2.26 (+0.16) yuan, referring to the comparable company giving the company 22 times PE in 2025 (for prudence, slightly lower than the average of comparable companies), and raised the target price to 37.40 yuan (originally 36.94 yuan).
It was newly designated by major customers, and the total order amount exceeded 5 billion yuan. The company recently signed a “supply contract” with S customers from well-known European automakers and obtained multiple project targets, with a total life cycle amount of about 5.256 billion yuan. This includes the F platform front and rear seat belt project. The life cycle is 8 years, with a total output of about 1.58 million units, and sales equivalent to about RMB 0.729 billion.
The S platform front and rear seat belt project has sales equivalent to about RMB 3.627 billion, and the life cycle sales of the S platform airbag project is equivalent to about RMB 0.9 billion. The life cycle of both projects is 8 years, and the total output is about 5.95 million units.
Cooperation with major customers continues to deepen, which is expected to accelerate the development of the global automotive passive safety market.
The company first announced in April 2024 that it was designated for the S customer project. The number and amount of support received for the project has increased dramatically, and cooperation with customers continues to deepen. S customer is the fourth largest automaker in global sales in 2023. As the global automotive supply chain pattern continues to adjust, the company is expected to develop more and more global automotive customers and accelerate domestic replacement in the automotive passive safety parts industry.
Performance is growing rapidly, and Q2 net profit to mother is expected to increase by 92.2% to 133.5% year-on-year. The company recently announced its 2024 semi-annual performance forecast. It is expected that H1 will achieve net profit of 1.20 to 0.132 billion yuan in 2024, an increase of 90% to 110% over the previous year. Among them, Q2 of 2024 is expected to achieve net profit of 0.59 to 0.071 billion yuan, an increase of 92.2% to 133.5% year on year, and -3.8% to +16.9% month on month. Currently, the company's products such as airbags and steering wheel assemblies are in the uphill phase. With the increase in product self-control rate and the release of superimposed scale effects, the company's profitability is expected to continue to increase in the future.
Risk warning: Downstream customer production and sales fall short of expectations, and new products and customer development fall short of expectations.