Incident: The company released the first quarter report of 2023. The company achieved revenue of 1,372 million yuan in the first quarter of 2023, +22.07%/-8.71% over the same period last year, net profit of 154 million yuan, +7.4%/+84.0% over the same period last year, after deducting the net profit of non-return mothers of 138 million yuan, +2.1%/+122.6% over the same period last year.
Gross profit margin declined slightly year-on-year and increased month-on-month. The company's gross margin increased by 27.52% during the period's expense quarter, to -0.34/+14.45pct over the same period. The quarterly expenses for the period were 14.76%, +2.0/+5.1pct compared to the same period, of which the financial expense ratio was 2.82%, and +2.04/+3.63pct compared to the same period last month. The increase was mainly due to changes in exchange rates.
Net cash flow from operating activities was -314.61% compared to the same period last year, mainly due to an increase in inventory reserves according to order plans, and a greater increase in cash for purchasing products and receiving labor payments.
Domestic and foreign customer resources are stable, and roof products accelerate business growth
The company's export business covers overseas automobile markets such as North America, Europe, Asia Pacific, etc., and the customer concentration is high. It mainly supplies parts products to Bentley, Porsche, Mercedes-Benz, BMW, Audi, GM, etc. Domestic customers are mainly advantageous automobile companies such as SAIC GM, Volkswagen, Changan Ford, Great Wall, NIO, Ideal, etc., with stable partnerships. The company plans to issue convertible bonds to invest 823 million yuan in the Mexican industrial base and 325 million yuan in the industrial base in Daishan County, Zhejiang, to produce 300,000 sets of integrated automobile roof system products and 600,000 sets of car roof products/700,000 sets of roof products per year to reduce the impact of tariffs, expand market space for roof products, and increase business scale. In addition, the company is leading technology in simultaneous development, mold manufacturing, inspection, etc., taking the lead in applying LED lights to sun visors and applying for patents. The 360-degree rotating ceiling reading lights were mass-produced, and the patented technology for tie rod structures was widely used.
Expand the category and advance into the roof to increase the value of bicycle support
The company strengthened its own management and technology improvement, maintained its competitive advantage, did a good job in production and operation, consolidated its advantageous position in the field of automobile sun sinks, seat headrests and armrests, ceiling central controllers, etc., strengthened supply levels, seized the opportunities for the rapid development of the NEV industry, expanded product categories, and expanded product categories from individual local interior parts such as sun visors to large-scale products integrated into the entire roof toughness system, thus boosting the value of cycling, closely following the development of new processes and technologies in the field of interior parts, increasing investment in R&D and promoting the implementation of refinancing projects.
Profit forecast: The company's revenue for 23-25 is expected to be 6.05 billion yuan, 7.04 billion yuan, 7.53 billion yuan, and the year-on-year growth rate is 18%, 16%, 7% in that order. Considering the gradual improvement in the company's operations, we raised the net profit of mothers and mothers in 23-25 from 800 million yuan, 1.0 billion yuan, and 1.10 billion yuan to 847 million yuan, 1,112 million yuan, 1,242 million yuan. The year-on-year growth rate was 49%, 31%, 12%, corresponding to PE19X, 14X, and 13X, maintaining the “buy” rating.
Risk warning events: cyclical fluctuations in sales volume in the downstream passenger car industry, sharp increases in raw material prices, customer demand falling short of expectations, anti-dumping risks in importing countries, etc.