Core views
The company's revenue for the first three quarters was 1,329 billion yuan, +9.01% year on year. The main reason was revenue growth in the aluminum alloy lightweight and chassis parts business segments; net profit was 29 million yuan, -23.24% year over year. The main reason was the increase in marketing and R&D investment for new projects and products. The company is an absolute leader in the domestic steering rack and shock absorber piston rod segment, with a market share of more than 50%, large production capacity and strong supply capacity. It is expected to maintain steady growth as the business expands. Large-scale supply of lightweight aluminum alloy products began in 2022. Revenue for the first three quarters of 2023 increased sharply by 68.96 million yuan over the same period last year. As mass production of new projects climbs, it is expected to further contribute to increased performance.
A major breakthrough has been made in vehicle integrated thermal management systems in the commercial vehicle sector, receiving a fixed target for a certain model water-cooled unit project from a domestic OEM customer; at the same time, the company is also actively implementing the targeted and mass production work of the vehicle integrated thermal management system project jointly developed with Sany Heavy Industries.
occurrences
The company released its report for the third quarter of 2023
The company's revenue for the 2023Q3 quarter was 478 million yuan, +9.3% year-on-year, +3.5%; net profit was 0.1 billion yuan, -12.9% year-on-year and -23.1% month-on-month. Revenue for the first three quarters was 1,329 million yuan, +9.01% year-on-year; net profit was 29 million yuan, -23.24% year-on-year.
Brief review
Revenue grew steadily, and net profit was under pressure compared to the same period last month
The company's Q3 single-quarter revenue was 478 million yuan, +9.3%, +3.5%; net profit was 0.1 billion yuan, -12.9%, -23.1%; gross profit margin 18.1%, y-2.08 pct, -0.02pct; quarterly expenses were 14.8%, +2.49pct, and +1.39 pct month-on-month. Revenue for the first three quarters was 1,329 billion yuan, +9.01% year on year. The main reason was the increase in revenue in the aluminum alloy lightweight and chassis parts business sector. In particular, as mass production of new projects climbed, the revenue of the aluminum alloy lightweight business sector increased sharply year on year; net profit was 29 million yuan, -23.24% year on year. The main reason was that with the marketing and R&D investment of new projects and new products, the company's sales expenses and R&D expenses increased. At the same time, due to differences in revenue time distribution, credit impairment preparations increased compared to the same period.
The chassis business is growing steadily for the basic market
The company has been deeply involved in the automobile chassis field for more than 20 years. It is an absolute leader in the domestic steering rack and shock absorber piston rod segments. It has maintained a dominant position in the market segment for many years, and has strong brand influence. Among them, rack products account for more than 50% of the rack market share and shock absorber components account for more than 50% of the shock absorber piston rod market share. The product customer system has basically covered all well-known steering system and shock absorption system manufacturers at home and abroad, and has had in-depth cooperation with internationally renowned parts suppliers such as Bosch, ZF, Nexteer, and Mando Mando for many years. It has a large production capacity for various products and a strong supply capacity, and is expected to maintain steady growth.
Lightweight aluminum alloy “from 0 to 1”. Large-scale supply of lightweight aluminum alloy products with integrated thermal management in air compression layout began in 2022. The products are mainly integrated valve terminals and Yoke parts. The main customers include BYD, ZF, etc. The revenue of the lightweight aluminum alloy business in the first three quarters of 2023 increased sharply by 68.96 million yuan over the same period last year. As mass production of new projects climbs, it is expected to further contribute to increased performance. The company's key layout of integrated vehicle thermal management systems in the commercial vehicle field has achieved a major breakthrough, receiving a fixed target for a model water-cooled unit project for a certain model from a domestic OEMs; at the same time, the company is also actively implementing the targeted and mass production work of the vehicle integrated thermal management system project jointly developed with Sany Heavy Industries; and is in touch with many leading commercial vehicle OEMs to seek more orders.
Investment suggestions: We expect the company to have revenue of 18.94/24.99/3,061 billion yuan in 2023-2025, net profit of 0.42/0.93/139 million yuan, corresponding to PE126.30/56.79/37.97x, corresponding to PE126.30/56.79/37.97x. We are optimistic that the company will rely on machining capacity and production management capabilities to vigorously develop lightweight, thermal management and other emerging businesses. The upward trend is clear, covered for the first time, and given a “buy” rating.