Incidents:
On January 16, 2024, the company released the 2023 annual performance forecast. The company's net profit for the full year of 2023 is expected to be 150-170 million yuan, an increase of +74%-+97% year-on-year; net profit after deducting non-return to mother is 185-205 million yuan, +18% -+31% year-on-year.
The cockpit and charging and distribution are developing together, and the domestic and overseas vehicle business continues to grow rapidly. The company's net profit for the full year of 2023 was 150-170 million yuan, which is in line with our previous expectations of 163 million yuan. Driven by a rebound in demand from European and American automotive OEMs, mass production of leading overseas OEMs, and strong export demand from major domestic OEMs, the company's overseas business orders were full in 2023, and overseas sales of smart cockpit components and new energy charging and distribution systems continued to grow. On the domestic side, production and sales of new energy vehicles maintained a high year-on-year increase, and the penetration rate of the company's main products among new car builders and national brands has further increased. At the same time, changes in the structure of automobile consumer demand have influenced the upgrading of middle and high-end car replacement consumption. The company's innovative products such as hidden electric vents and optoelectronic touch surfaces have been highly recognized by leading customers in the market, and the value of bicycles continues to grow. Jointly promoted at home and abroad, the company's new energy charging and distribution systems and smart cockpit components achieved both revenue and profit growth. Excluding factors such as changes in the parent company's controlling interest, the core car business subsidiary Junsheng Qunying 2023H1 achieved net profit of 149 million yuan, an increase of 70.31% over the previous year.
Junsheng Electronics continues to increase its holdings, demonstrating confidence in long-term development
Joyson Electronics, the core minority shareholder of the company's car business subsidiary Joyson Qunying, increased its holdings in the company in July and December 2023. As of December 14, 2023, Joyson Electronics held 13.03% of the company's share capital, making it the second largest shareholder of the company. 2024 is the first year after the end of the three-year performance commitment period for the company's acquisition of Joyson Qunying. The increase in Joyson Electronics holdings shows long-term confidence in the company's development.
Investment advice and profit forecasting
Benefiting from booming domestic and overseas business and continued cost reduction and efficiency, we slightly increased the company's 2023-2025 net profit of 1.64\ 2.38\ 293 billion yuan respectively, up 89.59%\ 45.64%\ 22.98% year on year, corresponding EPS 1.24\ 1.80\ 2.22 yuan, corresponding to EPS 25.72x\ 17.66x\ 14.36x based on current stock prices. Maintain the company's “gain” rating.
Risk warning
The risk that the NEV penetration rate falls short of expectations; the implementation of NEV charging and distribution infrastructure falls short of expectations; the risk that competition in the charging and distribution business increases the risk; the risk that the transformation of the cockpit parts business falls short of expectations; the risk that the balance equipment business shrinks beyond expectations; and the risk that the integration of the Junsheng Qunying business exceeds expectations.