Core views
In Q3 of 2023, the company achieved revenue, net profit and net profit of 140.97, 1.83, and 41 million yuan after deducting net profit, respectively, with year-on-year increases of 14.44% and 700.77%, respectively, to reverse losses. The company strategically aims to maintain commercial vehicles first, focusing on the two core indicators of “market share” and “profit margin” to enhance the core competitiveness of the enterprise and further consolidate and enhance its dominant position in the commercial vehicle business. The company's net profit for 2023-2024 is estimated to return to the mother's net profit of 1.08 billion yuan and 1.85 billion yuan, corresponding to the current stock price PE of 24X and 14X respectively, covering the first time, and giving it a “buy” rating.
occurrences
The company disclosed its performance report for the third quarter of 2023. 2023Q1-Q3 achieved operating income of 42,942 billion yuan, an increase of 20.99% over the previous year, net profit of 789 million yuan, an increase of 227.49% over the previous year, and deducted 452 million yuan in non-return net profit, which reversed losses.
Brief review
Q3 Revenue was basically flat month-on-month, and the combination of factors put pressure on profits. In 2023, Q1-Q3 achieved operating income of 42,942 billion yuan, an increase of 20.99% over the previous year, net profit of 789 million yuan, an increase of 227.49% over the previous year, and net profit of 452 million yuan was deducted from non-return mothers, reversing losses.
The full-year performance growth was mainly driven by increased sales volume. In Q1-3 of 2023, vehicle sales reached 450,000 units, an increase of 24.97% over the previous year. Among them, medium and heavy trucks, light trucks (including micro cards), medium and light trucks completed sales of 9.05, 31.32, 0.35, and 39,800 vehicles, respectively, up 27.26%, 38.07%, 9.66%, and 36.25% from the previous year. In Q3 of 2023, the company achieved revenue, net profit and net profit of 140.97, 1.83, and 41 million yuan after deducting non-net profit, respectively, year-on-year increases of 14.44%, 700.77%, and reversal of losses, with year-on-year increases of 1.02%, -40.60%, and -82.78%, respectively. Q3 Revenue was basically flat month-on-month, and profit declined a lot month-on-month, mainly due to the month-on-month decline in export sales, the cyclical nature of Ou Hui bus orders and the concentration of delivery in the first half of the year, and new heavy truck products in a climbing phase. In 2023, Q3 completed vehicle sales of 146,200 units, up 32.85% year on year and 1.76% month on month. Among them, medium and heavy trucks, light trucks (including microcards), medium and light trucks completed sales of 2.69, 10.54, 0.06, and 12,400 units, respectively, up 10.08%, 45.00%, -49.67%, and 18.61% from the previous year, up -4.29%, 3.94%, -6.70%, and 0.04%, respectively.
Q3 Gross margin increased slightly month-on-month, and overseas after-sales and consulting expenses increased.
The gross profit margin and net profit margin of 2023Q1-Q3 company were 12.01% and 1.76% respectively, +0.42 and +1.14 pct, respectively. The gross profit margin, net profit margin, and period expense ratio of the 2023Q3 company were 12.64%, 1.14%, and 11.34% respectively, with a year-on-year ratio of +2.48, +1.00, and +1.49pct, and +0.22, -1.00, and +2.18 pct, respectively. Among them, the Q3 sales/management/R&D/finance expense ratio was 4.38%, 3.17%, 3.94%, and -0.14%, respectively, +0.74, +0.02, +0.14, +0.58pct, +1.57, +0.17, +0.24, and +0.20pct over the previous year. Sales expenses increased by 227 million yuan over the previous month, mainly due to an increase in overseas sales expenses, an increase in after-sales claims, and an increase in consulting expenses for heavy truck overseas business.
The leading position of commercial vehicles is stable, and it is focusing on market segments to increase its share. The company strategically aims to maintain commercial vehicles first, focusing on the two core indicators of “market share” and “profit margin” to enhance the core competitiveness of the enterprise and further consolidate and enhance its dominant position in the commercial vehicle business. (1) Medium and heavy truck: Seize market segmentation opportunities, further enhance product competitiveness through products such as Galaxy, New EST, GTL Extreme Edition, GTL Kunlun, etc., while continuously optimizing channel quality and comprehensively empowering the used car business. The next step is to adhere to the middle and high-end market leadership, continue to focus on the express delivery and cold chain markets, achieve restorative growth, and increase market share. (2) Light truck: Light truck mid-term facelift products are fully launched, and product strength has been further enhanced. The next step is to continue to improve the layout of new energy products, and the simultaneous development of pure electricity and hybrids. (3) Large and medium-sized buses: Aim to achieve sustainable profit, focus on value customers, and focus on key regions. The next step will focus on improving the product portfolio to complete the replacement and upgrading of urban, intercity, and school bus products; continue to optimize existing network capabilities, dig deeper into the commercial, medical and other high-end special vehicle markets, and enhance business profitability. (4) Light buses: The next step will focus on expanding the product portfolio through large VAN upgrade products, medium VAN annual models, and elite products, and comprehensively lay out the large, medium, and medium VAN markets to achieve scale growth.
Investment advice
2023Q3 achieved revenue, net profit and net profit of 140.97, 1.83, and 41 million yuan respectively, up 14.44% and 700.77% year-on-year, respectively, to reverse losses. The company strategically aims to maintain commercial vehicles first, focusing on the two core indicators of “market share” and “profit margin” to further consolidate and enhance its dominant position in the commercial vehicle business. The company's net profit for 2023-2024 is estimated to return to the mother's net profit of 1.08 billion yuan and 1.85 billion yuan, corresponding to the current stock price PE of 24X and 14X respectively, covering the first time, and giving it a “buy” rating.