Core viewpoints

23Q2 has revenue of 1.034 billion yuan, year-on-year + 19.3%, month-on-month + 4.7%; net profit of 55.23 million yuan, year-on-year + 45.4%, month-on-month + 39.3%; gross profit 15.17%, year-on-year + 2.82pct, month-on-month + 2.83pct. 23H1 continues to develop its auto parts business, especially the new energy business, with breakthroughs made by specific customers, Geely Weirui, BYD and other customer groups, resulting in significant revenue growth.

Event

On August 18, the company released its annual report for 23 years. The company's 23H1 revenue was 2.021 billion yuan, + 19.2% compared with the same period last year, and the net profit returned to its mother was 94.88 million yuan, + 35.8% compared with the same period last year.

Brief comment

23Q2 has revenue of 1.034 billion yuan, year-on-year + 19.3%, month-on-month + 4.7%; net profit of 55.23 million yuan, year-on-year + 45.4%, month-on-month + 39.3%; gross profit 15.17%, year-on-year + 2.82pct, month-on-month + 2.83pct.

Auto parts business revenue of more than 1.1 billion, become the core driving force of performance growth.

23H1, the company's auto parts business achieved business income of 1.11 billion yuan, + 44.9% compared with the same period last year, driving the company's revenue in the first half of the year to exceed 2 billion yuan. Business profitability has improved significantly: auto parts gross profit margin 10.71%, year-on-year + 8.04pct; electric vehicle parts revenue 474 million, year-on-year + 6.7% steady growth.

Profitability increased significantly, and the expense rate increased slightly during the period.

23Q2's gross profit margin is 15.17%, year-on-year + 2.82pct, month-on-month + 2.83pct. Sales expense rate 0.58%, year-on-year + 0.08pct; management expense rate 2.93%, year-on-year + 0.47pct; R & D expense rate 3.63%, year-on-year-0.35pct. Under the obvious increase in gross profit margin, although the expense rate increased slightly during the period, the company still achieved a net profit margin of 5.34%, which was + 0.96pct compared with the same period last year.

With the continuous promotion of the motor stator and rotor assembly project, the sustainable development of new energy business companies adhere to the strategy of "one red flower, two green leaves" and take the new energy vehicle business as the development direction. a development model based on traditional motor parts and electric bicycle parts. New energy business includes drive motors and battery precision structural components, with obvious growth.

In January 2023, the annual production of 3 million sets of new energy vehicle motor stator and rotor assembly project started in Liangjiang New District, a small part of which is expected to be completed within 23 years, and all will be put into production next year.

Profit forecast: the company focuses on the motor parts industry for more than 30 years, and the auto parts business is growing brightly. It is estimated that the net profit of homing from 2023 to 2025 is 2.34,2.73 and 396 million yuan respectively, corresponding to the PE of 24.7,21.2 and 14.6 times respectively.

Risk hint: the risk of industry and business performance fluctuation, the risk of raw material price fluctuation, the risk of RMB exchange rate fluctuation.

Sensitivity analysis: the company's new energy vehicle parts business is the main growth engine.

In a pessimistic scenario, the expansion of the new energy vehicle business was not as expected, resulting in a growth rate of 30%, 25%, 20% respectively in 2023-2025 (the neutral expectation is 34.8%, 29.7%, 24.8%). Electric vehicle parts grew steadily, with a growth rate of 8% from 2023 to 2025, and ice press parts / other motor and accessories / other businesses were under pressure in 2023. The growth rate was-5%, 10%, and 5%, respectively, for recovery growth in 2024 and 2025, and the growth rates were 0%, 5%, 5%, 5%, 5% and 5%, respectively. In terms of profitability, the company's profitability is under pressure. It is expected that the decline in raw material costs in 2025 will lead to an increase in gross profit margin, with a net profit margin of 5%, 5% and 6% respectively. It is estimated that the net profit of homing from 2023 to 2025 will be 250, 343 million yuan, respectively, and the corresponding PE will be 26.9, 23.1, and 16.8 times, respectively.

In an optimistic scenario, the expansion of the new energy vehicle business exceeded expectations, making the auto parts business grow by 40%, 35%, 30% respectively from 2023 to 2025 (the neutral expectation is 34.8%, 29.7%, 24.8%). Electric vehicle parts and components grew in double digits, growing at a growth rate of 12% in 2023-2025. Ice press parts / other motors and accessories / other businesses were under pressure in 2023. The growth rates were 0%, 5%, and 5%, respectively, for recovery growth in 2024 and 2025, and 5% and 5%, respectively, for 2024 and 2025. In terms of profitability, under the rapid growth of revenue, the scale effect has improved, and the company's profitability has recovered obviously. it is expected that the decline in raw material costs in 2025 will lead to an increase in gross profit margin, with net profit margins of 5.5%, 5.5% and 6.5%, respectively. It is estimated that the net profit of homing from 2023 to 2025 is 249 million yuan, respectively, and the corresponding PE is 18.8 yuan, 13.0 times, respectively.

Risk analysis.

1. The risk of fluctuations in industry and operating performance. The performance of the company's auto parts and accessories manufacturing industry depends on the development of the downstream automobile industry, and the automobile industry is greatly affected by the macroeconomic cycle and national policies. Although with the support of the policy, China's automobile industry has gradually recovered, but the sales of traditional fuel vehicles have declined, which has had an impact on the company's related parts business. New energy vehicles are developing rapidly and gradually replacing traditional fuel vehicles, but the company is still in the initial stage of development and transformation in the field of new energy. It is still uncertain whether the company can seize the opportunity of the development of new energy industry and form new revenue and profit growth points.

two。 The risk of fluctuations in raw material prices. The main raw materials required by the company are steel (silicon steel, cold-rolled steel), copper (enamelled wire) and magnetic steel. The sharp fluctuation of the price of steel and other raw materials has a great impact on the production of the company's main products, thus affecting the company's business performance.

3. The risk of RMB exchange rate fluctuations. At present, some of the company's products are mainly exported and settled in US dollars and euros. Therefore, the exchange rate fluctuations of RMB against foreign currencies, especially the US dollar and euro, will have a certain impact on the company's profits.