Maintain "Buy" and raise TP to HK$28.00. Considering 1) the business growth derived from the rapid increase in the sales volume of passenger vehicles in China; 2) the business synergy brought by the further business expansion (especially the European market) in overseas markets; 3) the uncertainties of overseas business growth brought by the gradual rise of automobile and parts tariffs; and 4) uncertainties of shipping costs due to geopolitics, we forecast Minth Group’s ("Minth" or the "Company") 2025-2027F EPS to be RMB2.374 (-0.283)/ RMB2.920 (-0.286)/ RMB3.733 (newly added). We give the Company 10.4x 2025F PER, corresponding to a TP of HK$28.00, and maintain "Buy" rating.
　　The overseas business continued to grow in 2024, with GPM rising yoy and hoh. Minth achieved revenue of RMB23.15 bn in 2024, up 12.8% yoy. Overseas business revenue‘s share of total revenue reached 59.7%, up 4.5 ppts yoy. Net profit attributable to shareholders of the Company recorded RMB2.32 bn, up 21.9% yoy. The Company's GPM recovered to 28.9% in 2024, up 1.5 ppts yoy /0.4 ppts hoh. As we expected, the Company's battery house business (BHB) is officially on par with the other three traditional BUs, and there is still room for overseas GPM to rise. We forecast that Minth's GPM will return to 30% in 2025F.
　　The BHB continued to grow rapidly, and BHB’s proportion of total revenue further rose by 5.8 ppts yoy. Driven by rapid development of OEMs’ EV business, the BHB revenue has reached 23.1% of total revenue in 2024. As the penetration rate of NEVs continues to rise, the BHB’s business in the Chinese market will continue to expand rapidly, and in overseas markets (especially European market) will also see a big wave of increase ahead. The Company's current business order backlog reached RMB250.0 bn, a hoh increase of 5.9%, of which the Company's current battery housing order backlog is close to RMB135.0 bn. As the Company has become a global leading battery house supplier with local manufacturing and supply capabilities in Europe, North America and China, we expect the Company's BHB revenue to continue to grow at a CAGR of around 23.6% in the next 3 years.
　　Intelligent exterior decoration parts business continues to expand, with the addition of humanoid robots and eVTOL BUs on board. The Company’s BU of intelligent integrated exteriors continues to develop intelligent front modules, smart side doors and intelligent tailgates, all of which have been designated by some new domestic “new EV forces”. In the next few years, we expect intelligent integrated exteriors BU to begin to increase rapidly and gradually become another high-prospect BU of the Company. In addition, the newly established humanoid robot BU has also made good progress. The Company has provided humanoid robot solutions to 3-5 customers and delivered samples to 2 of them; in the low-altitude economy, the Company provides core parts for eVTOL aircrafts. We believe that the Company has the ability to gradually incubate these two BUs into new growth engines for the Company in the future. Diversified new BUs are expected to bring new revenue contributions to the Company in the coming years.
　　Risks: 1) global automotive market sales may fall short of expectations; 2) freight costs and raw material prices may increase; and 3) geopolitics may lead to a slowdown in business expansion.