Introduction to this report:

The company's performance exceeded expectations, and the revenue and profit growth rate in the Q3 quarter were impressive, and I am optimistic about the company's internationalization strategy.

Key points of investment:

Investment advice: Driven by the equipment renewal policy, the company's performance growth rate is expected to be better than the industry's growth rate. The company's 2024-26 EPS is expected to be 1.28/1.70/2.04 (+0.13/+0.38/+0.55) yuan, refer to the valuation level of comparable companies in 2025, give the company 20 times PE in 2025, raise the company's target price to 34.0 yuan, and maintain the increase rating.

Results exceeded expectations, and Q3 results maintained rapid growth. In the first three quarters of 2024, the company achieved revenue of 3.673 billion yuan, up 24.95% year on year, and achieved net profit of 0.48 billion yuan, up 31.71% year on year. Among them, the company achieved revenue and net profit of 1.304 billion yuan and 181 million yuan, up 33.23% and 59.87% year on year. Net profit attributable to shareholders of listed companies in the third quarter after deducting non-recurring profit and loss was 0.177 billion yuan, up 73.76% year on year. Performance accelerated The release shows the company's strong downstream demand and the boom in overseas markets.

Profit margins continued to rise, and overall expense ratios remained stable. The company's gross sales margin and net sales margin for the first three quarters of 2024 were 34.10% and 13.43%, respectively, up 0.97pct and 0.66pct from the same period last year. Of these, the Q3 gross profit margin was 35.01%, a new high in recent years, up 2.21pct from the second quarter, and the Q3 net profit margin was 14.36%, up 1.08pct from Q2. In terms of expense ratios, the company's sales expenses ratio and management expense ratio were 9.41% and 5.06%, respectively, which remained stable compared to the same period last year. Financial expenses increased 359.10% year-on-year in the first three quarters, mainly due to the appreciation of RMB. Furthermore, the company's non-operating income exceeded 3 million yuan in the first three quarters, a significant increase over the same period last year, mainly due to increased asset disposal profits.

The international strategy has achieved outstanding results and accelerated delivery of integrated die-casting products. The company continues to increase overseas market development efforts, further expand its existing market share, implement localized investments and operations in important markets such as India, and enhance its competitiveness in the international market. Use the “HPM” brand to explore the North American and European markets, give full play to the dual brand advantages of “YIZUMI” and “HPM”, and comprehensively create the international image of the Yizumi brand. At present, the company has more than 40 overseas distributors, and its business covers more than 70 countries and regions. In addition, in the first half of 2024, the company accelerated the implementation of advanced, intelligent, and green product technology. The 8500T oversized injection molding machine was officially launched and delivered to customers, and the LEAP 7000T oversized die-casting machine was successfully delivered to Changan Automobile. The machine will be used in the production of front cabins and rear floor panels of Changan's next-generation new energy vehicles. This is also an important milestone for Yizumi in the field of metal forming.

Risk warning: Market competition is intensifying, and the expansion of integrated die-casting equipment falls short of expectations.