The company's 23Q3 achieved revenue of 40.16 billion yuan, year-on-year + 28.0%, month-on-month + 9.1%, deducted non-return net profit of 1.214 billion yuan, year-on-year + 60.7%, month-on-month + 3.0%, the performance is in line with market expectations. The company is a leading supplier of comprehensive auto parts in China, with continuous expansion of intelligent and electric product lines and continuous optimization of customer structure. We maintain the company's annual EPS forecast of 2.38, 2.65, and 2.92 yuan in 2023-24-25. The company's PE hub has been about 10 times in the past three years, and we have given the company 10 times PE in 2023, corresponding to the target price of 24 yuan, maintaining a "buy" rating.
23Q3 performance is in line with market expectations, business resilience is prominent. 2023Q3 achieved revenue of 44.589 billion yuan, year-on-year + 0.1%, month-on-month + 11.04%; net profit of 1.9 billion yuan, 19.5%, + 35%; deduction of non-return net profit of 1.751 billion yuan,-22.3%, + 44.3%, performance in line with market expectations, and business resilience continued to reflect. In terms of business income, 23Q3 internal and external decoration, metal forming and moulds, functional parts, electronic and electrical devices, and hot processing respectively achieved income of 33.95 billion / 2.78 billion / 8.06 billion / 710 million / 170 million yuan, which was + 6.9%,-23.4%,-6.6%,-61.5% and-10.5% respectively compared with the same period last year. In terms of profits, 23Q3 internal and external accessories, metal forming and moulds, and functional parts respectively achieved a net profit of 1.08 billion yuan, 110 million yuan and 630 million yuan, respectively, compared with the same period last year.
The gross profit margin of 23Q3 fell slightly and the cost rate improved significantly. 2023Q3's gross profit margin is 12.3%, year-on-year-1.7pcts, month-on-month-0.3pct, affected by the industry price war, gross profit margin fell slightly. The expense rate is 9.6%, year-on-year + 0.5pct, month-on-month-0.5pct, and the cost-to-month ratio is significantly improved. The sales expense rate is 0.7%, year-on-year + 0.2pct, month-on-month ratio + 0.1pct; management expense rate is 4.5%, year-on-year + 0.3pct, month-on-month ratio-0.9pct; R & D expense rate is 4.1%, year-on-year-0.5pct, month-on-month ratio-0.1pct; financial expense rate is 0.3%, year-on-year + 0.5pct, month-on-month + 0.4pct.
Smart, electric product lines continue to supplement, have been added to the fixed point. In the field of intelligent driving, the 4D imaging millimeter wave radar of the Electronics Branch realizes the small batch supply of Youdao Zhidu, and the development of new products such as nR1V fusion system and solid-state lidar is advancing as planned. In the field of intelligent car lights, Huayu Vision SLIM module technology has mass produced Cadillac LYRIQ, megapixel DLP digital headlights, front and rear ISD digital interactive taillights and control system lighting master and other products have realized the mass production and supply of Zhiji and Haohe related models. According to the company's website, the company is also laying out intelligent vision system products such as AR HUD head-up display, CMS electronic rearview mirror technology, SIDP surround and interactive lighting products. In the field of new energy, Huayu Electric is promoting the synchronous development of drive motors with a number of customers; Huayu Magna leads the completion of the domestic replacement of power semiconductor modules and chips, and the local R & D capability is further enhanced.
Overseas demand has gradually recovered since 22Q4, and the share of income is expected to increase. Since 22Q4, the automobile demand of Europe, America and North America has been gradually repaired, the company's current overseas business is mainly subsidiary Yanfeng interior and exterior decoration and seat business, Yanfeng's current main products include zero pressure seats, active pre-collision safety system and other solutions, and in terms of production capacity layout, the company's Serbian and Mexican factories are for BMW, Volkswagen, Tesla, Inc. and other customers. The company is expected to rely on Yanfeng Andaotuo's seat business platform, with the help of the global customer base of interior business, to promote global expansion and reshape the competitive landscape of the global automobile seat industry.
Risk factors: domestic automobile market sales are lower than expected; the company's products and technology iteration risk; domestic end-market price war intensified faster than expected; overseas market demand repair is not as expected.
Investment suggestion: the company is a leading supplier of comprehensive auto parts in China, vigorously cultivate new business of electrification and intelligence, and accelerate the landing of the project. The company continues to obtain orders from other head mainframe factories other than SAIC Group, and the customer structure is constantly optimized. We maintain the company's annual EPS forecast of 2.38pm 2.65pm 2.92 yuan in 2023-24-25.
The company's PE hub has been about 10 times in the past three years, and we have given the company 10 times PE in 2023, corresponding to the target price of 24 yuan, maintaining a "buy" rating.