Achieved net profit of 65.11 million yuan to the mother in 2022
In 2022, Foton Motor achieved revenue of 46.447 billion yuan, a year-on-year decrease of 15.51%, and the net profit of its mother was 65.11 million yuan, an increase of 101.29% over the previous year. After deducting non-net profit loss of 308 million yuan, the scale of losses narrowed sharply over the previous year. Q1 The company achieved revenue of 14.97 billion yuan, an increase of 20.88% over the previous year, and the net profit of the mother was 298 million yuan, an increase of 119.9% over the previous year, reversing losses from the previous month. We expect the company's EPS for 2023-2025 to be 0.16/0.25/0.31 yuan respectively. Comparable to the company's Wind 2023, the average PE value is 20.0 times. The company's light truck business accounts for a relatively high share of the industry, leading the market share in the industry. We gave the company 30.5 times PE in 23 years, with a target price of 4.88 yuan, maintaining the “buy” rating.
Industry sentiment declined in '22 and sales were under pressure, and export business bucked the trend and demand in the commercial vehicle industry was sluggish in '22. The company's domestic sales of light goods vehicles and medium to heavy goods vehicles fell 30.5%/57.5% year on year to 26.6/69,000 units. However, in '22, the company's export business ushered in a sharp increase. Overseas sales of light trucks reached 46,000 units by +36.5% year on year; overseas sales of medium and heavy trucks increased by +78.1% to 32,000 units, driving the revenue of medium and heavy trucks to increase by 124.9% year on year, and gross margin was +4.41pct year on year; overseas sales of large, medium and light truck were +129%/119% year on year. At the same time, the increase in the share of overseas business also brought gross margin of +1.21pct to 11.38% year-on-year in '22. The company completed inefficient asset divestment in '22 and continued to promote fee reduction and efficiency. The sales/management fee rate was -0.17/-0.21pct to 3.85%/3.20%, mainly due to depreciation reduction due to the depreciation of Baowo's debt-backed assets in the previous period; the R&D fee rate was +0.31pct to 3.43% year-on-year.
23Q1 light trucks took the lead in recovering, and domestic Mercedes-Benz heavy trucks contributed incrementally
In 23Q1, the company achieved revenue of 14.97 billion yuan, +20.9%/36.7% over the same period; the return mother's net profit was 298 million yuan, +119.9% year on year, reversing losses; after deducting non-net profit of 174 million yuan, +118.4% year on year. The main reasons for the improvement in business performance include: 1) 23Q1 light logistics vehicles benefited from the recovery in consumption, and the pace of improvement in demand was faster than in the medium to heavy truck market dominated by mainline logistics. As a leader in the light truck market, the company fully benefited. Q1 light truck sales increased 11.2% year on year to 106,000 units, +53.5% month on month; 2) Two series of domestic Mercedes-Benz heavy truck products went on sale at the end of '22, Q1 sales of Fukuda Daimler products increased 31% year on year to 22,000 units, and the investment income contributed by joint ventures was adjusted to 180 million yuan over the same period last month.
Focus on the main business to accelerate the promotion of new products, and performance is expected to continue to recover
We believe that the light truck and heavy truck industry is expected to continue to recover moderately in '23 under favorable factors such as the recovery of downstream markets, steady growth spurring real estate infrastructure, a new round of replacement demand, or accelerated release under stricter environmental policies. Futian is deepening the reform of lightweight equipment, focusing on the commercial vehicle industry. In the light truck sector, it is expected that it will seize the share of lower-back customers and establish a leading position in the market through the launch of new products such as M cards and X cards.
In the medium to heavy truck sector, the company may take advantage of the technical advantages of cooperation with Cummins and ZF to enjoy the incremental space brought about by the increased penetration rate of AMT transmissions; at the same time, domestic Mercedes-Benz heavy trucks have a cost-effective advantage and are expected to maintain excellent sales performance. We are optimistic that with the recovery of the industry, the company's performance will continue to improve.
Risk warning: commercial vehicle sales fell short of expectations; material price increases exceeded expectations; prices fell short of expectations.