Company 2023 Q2 achieved revenue of 1.507 billion yuan, year-on-year + 32.8%, month-on-month + 9.8%; net profit of 185 million yuan, + 10.8%, + 20.2%; deduction of non-return net profit of 230 million yuan, + 44.4%, month-on-month + 66.9%, slightly exceeding market expectations. We maintain the company's annual net profit forecast of 807 25xPE in 2023-24-25 at 1.021112.35 billion yuan, valuing the company at 2023, raising the target price to 22 yuan (originally 19 yuan) and maintaining a "buy" rating.
2Q23 performance slightly exceeded market expectations, single-quarter profit reached the highest level in nearly two years. On August 29, the company announced that revenue in the first half of 2023 was 2.879 billion yuan, + 27.5% year-on-year, and net profit was 339 million yuan, + 9.2%. Of this total, revenue in the second quarter of 2023 was 1.507 billion yuan, year-on-year + 32.8%, month-on-month + 9.8%, and return-to-home net profit was 185 million yuan, + 10.8% and + 20.2% respectively. Realized deduction of non-homed net profit of 230 million yuan, year-on-year + 44.4%, month-on-month + 66.9%, performance slightly exceeded market expectations, single-quarter performance reached the highest level in nearly two years, we believe that it is mainly due to the volume of downstream customers of the company and some exchange gains. GM Global 2023Q2, a downstream customer of the company, achieved sales of 1.528 million vehicles, year-on-year + 12.0%, month-on-month + 27.3%; Ford Global 2023Q2 sales achieved 1.042 million, year-on-year + 11.1%, month-on-month + 10.8%. The recovery of downstream customer sales drove the company's performance growth.
The gross profit margin is higher than the same period last year, and the management level continues to rise. 23Q2's gross profit margin is 28.1%, year-on-year + 1.2pcts, month-on-month + 0.6pct, gross margin level remains stable. The expense rate is 9.2%, year-on-year-0.6pct, month-on-month-5.5pcts, and operating efficiency continues to improve, of which the sales expense rate is 2.7%, year-on-year-0.6pct, month-on-month + 0.9pct; management expense rate is 7.2%, year-on-year-0.1pct, month-on-month ratio + 0.7pct; R & D expense rate is 3.8%, year-on-year-0.5pct, month-on-month + 0.1pct The financial expense rate is-4.5%, year-on-year + 0.6pct, month-on-month-7.3pcts, mainly due to the increase in exchange rate gains brought about by exchange rate changes. We believe that with the recovery of downstream customer sales, the company's capacity utilization is expected to gradually pick up, stack the company's ceiling and other high-value products gradually, the company's profit level is expected to continue to improve. In addition, the company will step up its global strategic layout, increase investment in Mexican companies, set up overseas sales and service network companies, and improve customer service capacity, which is expected to further improve the company's operational efficiency and continue to improve the level of operation in the future.
The sun visor industry leader, the globalization strategy advances steadily. Since the acquisition of Motus, the second largest sunshade company in North America, the company has become the world's largest supplier of automotive sunshades, with a global market share of about 46%. In 2022, the company's sunshade business sold 56.52 million pieces, + 23.2% compared with the same period last year; the sunshade business achieved revenue of 3.66 billion yuan, + 23.6% compared with the same period last year, with strong growth momentum. The company continues to optimize the downstream customer structure, has realized the comprehensive matching of luxury car companies such as Bentley and Porsche, as well as joint ventures such as SAIC-Volkswagen and SAIC-GM, and has successfully introduced its products into new energy vehicle enterprises such as NIO Inc., XPeng Inc. and ideals. customer resources are optimized in an all-round way. In addition, with the help of Motus factory floor visor and ceiling central controller in the production side, the company continues to promote the construction of production bases and R & D centers in Shanghai, Zhejiang, the United States, France, Mexico and other places, and has set up overseas sales and service network companies in Japan, Korea, Germany, Britain, Spain, the Czech Republic and other countries. At present, the company has built a global marketing and service network covering 18 countries, and the process of globalization has been significantly promoted.
The product matrix expands and the ceiling business opens the performance growth curve. The technology of the sunshade board of the company's core product is mature, and the roof of the same passenger car roof system has a high degree of homology in mold manufacturing, foaming and other processes. With the help of accumulating many years of enterprise service experience and interior solutions, the company has expanded the product category to automotive interior products such as headrest and ceiling central controller, and the product matrix has been continuously broadened. In addition, the company increased investment in the layout of ceiling production capacity. In July 2023, the company announced that it planned to issue 908 million yuan of convertible bonds with a maturity of 6 years, which would be used for the construction of Mexico automobile interior decoration industry base and annual production of 700000 sets of ceiling products. The production capacity of roof products has been further opened. Compared with the bicycle value of 65 yuan for sunshade panels, the bicycle value of roof system integration products is more than 500 US dollars. It is expected to become the second growth curve of the company. We believe that, as a global sunshade leader, the company is actively expanding its product matrix, and is expected to rely on its own customer advantages of North American GM, Chrysler, ideal, NIO Inc., XPeng Inc. and other well-known automobile companies in the future. enable ceiling system integration products to open the revenue growth curve.
Risk factors: the prosperity of the automotive industry is declining; the company's product research and development progress is not as expected; the company's new products and new customer expansion is not as expected; the company's capacity construction is not as expected.
Earnings forecast, valuation and rating: the company is the global leader in sunshade panels, with a global market share of about 46%.
The company actively adjusts the company's customers and product structure, accelerates the matching ideal, NIO Inc., XPeng Inc. and other customers, and relies on the advantages of homologous technology to layout high-value products such as headrest and ceiling, which is expected to improve the matching of Ford, GM, Chrysler and other customers. In addition, the company plans to issue convertible bonds and increase the construction of factories in Mexico, which is expected to speed up the global layout. We maintain the company's annual net profit forecast of 8.07 pound 10.21 / 1.235 billion yuan in 2023-24-25, with reference to the company's CAGR forecast for the next three years, and considering that the company's 2023Q2 single-quarter net profit and non-return net profit reached the highest in nearly two years, we valued the company's 25xPE in 2023, raising the target price to 22 yuan (originally 19 yuan) and maintaining the "buy" rating.