Event description
Huayu Automobile released its quarterly report for 2023: the company achieved operating income of 44.59 billion yuan, an increase of 0.1% over the same period last year, an increase of 11.0% over the previous year, and a net profit of 1.9 billion yuan, down 19.5% from the same period last year, an increase of 35.0% over the same period last year.
Event comment
The company's external customers have been developed smoothly, and the company's revenue has achieved steady growth in the third quarter. Downstream production and marketing continued to perform well in the third quarter. Global automobile production in July-August was 14.712 million, which was + 5.3% compared with the same period last year. Domestic passenger car Q3 production was 6.886 million, with a high base of + 1.6% and + 14.6% compared with the same period last year. The production and sales of the company's major customers fluctuated. SAIC sold 1.29 million vehicles, year-on-year-19.0%, month-on-month + 11.6%, of which SAIC-Volkswagen and SAIC-GM sales were-15.4% and-22.7%, respectively, + 29.9% and + 2.3%, respectively. Tesla, Inc. Q3 due to production and marketing transformation affected global production of 435000 vehicles, year-on-year + 18.9%, month-on-month-9.3%, of which China produced 227000, year-on-year + 15.1%, month-on-month-6.8%. The company continues to actively open up external customers, coupled with overseas downstream production and sales growth, Q3 achieved revenue of 44.59 billion yuan, year-on-year + 0.1%, month-on-month + 11.0%, the performance is better than the downstream major customers.
Affected by the annual decline of downstream customers, the company's profit level fluctuates slightly. Q3 company gross profit margin 12.3%, year-on-year-1.7pct, month-on-month-0.3pct, mainly due to the annual decline of the company's major customers. The expenditure rate during the Q3 period is 8.7%, year-on-year-0.5pct, month-on-month-1.5pct, mainly benefiting from the decline in R & D expense rate and management expense rate. The investment return of Q3 on joint ventures and joint ventures is 750 million, which is-13.3% compared with the same period last year, and + 23.3% compared with the previous year. Q3 achieved a net profit of 1.9 billion, year-on-year-19.5%, month-on-month + 35.0%, corresponding to home-return net interest rate of 4.3%, year-on-year-1.0pct, month-on-month + 0.8pct.
External customers continue to open up, overseas is expected to enter a profit period, the proportion of new energy increases, and new technologies advance well. The company's external customers continued to open up, and the transformation of new energy accelerated. In the first half of the year, the revenue of vehicle customers outside SAIC reached 55.4%, an increase of 6.0 pct compared with the same period last year. As of the end of June this year, the company's new business life cycle orders, new energy vehicles-related models account for more than 60% of the total amount of business. The company pays close attention to the trend of intelligent electric, and accelerates product development and application. Millimeter wave radar, intelligent cockpit and electric drive products are all progressing smoothly. In the first half of the year, shipments of all kinds of millimeter wave radar exceeded 260000, an increase of more than 75% over the same period last year. Intelligent cockpit XiM23s has been designated by customers such as automobile, SAIC GM, Chery and Selis. The electric drive has been supplied to Volkswagen MEB platform and general BEV3 platform, and the electric drive system of medium and high power platform in 150kW has been fixed by the Great Wall.
Investment advice: the continuous promotion of new products and new customers will support the steady growth of the company's performance. In the face of the outbreak of downstream new energy vehicles and the high-end of independent brands, the company is expected to seize the opportunity of industry change and increase the proportion of external customers. The new business is advancing steadily and new growth points are tapped. The dividend ratio of the company in 2022 is 38.5%, corresponding to 4.9% of the dividend yield in the past 12 months.
It is estimated that the net profit from 2023 to 2025 will be 70.1,79.1 and 9.06 billion yuan respectively, with corresponding valuations of 8.0x, 7.1x and 6.2x, maintaining the "buy" rating.
Risk hint
1. the prosperity of new energy vehicles is not as good as expected.
2. The rise in raw materials puts pressure on profitability.