Gotion High-tech Co Ltd Class A

002074: XSHE (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	¥69.60	Yhlv	Vzkjxgpb

Gotion High-tech Earnings: Decent Volume and Better Margin Lead to Profit Beat

Vincent Sun

Aug 29, 2024

Gotion High-tech recorded in-line revenue for the second quarter, with first-half revenue accounting for 46% of our previous forecast for the full year. Net profit for the period beat our expectation on a better margin trend. Gross margin gained 6 percentage points in the quarter from last year, despite increasing price competition. We raise our fair value estimate by 5% to CNY 18.20 from CNY 17.30 per share. Our fair value implies a forward 2025 price/earnings ratio of 49 times—fairly valued, in our view, with shares trading in 3-star territory.

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