Four-dimensional Tu's new 2023 performance forecast falls short of market expectations
Siweitu announced a new 2023 performance forecast: The company expects revenue of 30.6 billion yuan to 3.42 billion yuan in 2023, -8.6% to 2.2%; net profit to mother is expected to be -12.2 to -987 million yuan, down 263.0% to 190.4% year on year; net profit without return to mother is estimated to be -12.9 to -1,074 billion yuan, down 267.0% to 205.8% year on year. Competition in the company's industry continued to intensify throughout 2023. Combined with the company's enhanced customer service, cost increases, and the 2023 performance forecast fell short of market expectations.
Key points of interest
Competition intensifies and squeezes gross profit space, and the strategy focuses on catalyzing the growth of the smart driving business. The unit price of the company's automotive supply chain track products continued to drop in 2023, putting pressure on the company's related product margin. The company actively transformed into a solution provider, focusing on a development strategy with the smart driving business as the main line. The increase in the number of smart driving software and hardware integrated products throughout the year drove the smart driving business to grow. In terms of Zhexin's business, MCU chip sales increased year-on-year throughout the year. We expect that there may be some pressure on the gross profit of the Zhixin business due to price pressure disturbances in the supply chain. The company's Zhiyun and Smart Cabin businesses were affected by both competitive pressure and active strategic adjustments in 2023, and related revenue declined year-on-year.
Smart driving's cost-effective solutions create differentiated advantages, and Zhixin's international cooperation goes one step further. In the field of Zhiyun, the company released HD Lite, a cost-effective and lightweight map product, in October 2023, and launched the intelligent map service platform MineData4.0 in November. Based on this platform, it also provides various services to a well-known express logistics service provider, deeply reaching the logistics market. In the field of smart driving, the company provides cost-effective solutions to form a differentiated competitive advantage for the mainstream price car market. In the smart cabin field, the company's smart cockpit software solutions have been successfully applied to various models of Japanese customers and successfully achieved front-loading mass production. The market share of its five major terminal hardware product matrices has been further expanded; at the same time, the company launched a “thoughtful” smart cabin model to enhance the user interaction experience. In the field of Zhixin, the AC7840x won the “2023 Best MCU Chip Award”, and the AC8025 won two well-known foreign OEM projects. The company expects to cover 5 million vehicles. In addition, the company's Jiefa Technology has established an ecological partnership with Yishi Intelligence to jointly launch solutions for automotive-grade MCU chip information security to jointly build an intelligent connected vehicle safety ecosystem.
Profit forecasting and valuation
Considering that the company's cloud demand fell short of expectations and smart driving competition lowered the gross profit margin, we lowered 23/24 revenue by 20.2%/30.4% to $330/3.7 billion yuan, adjusted net profit to mother in 2023 from -270 million yuan to -1.10 billion yuan, and lowered the 24-year profit forecast from 88 million yuan to -750 million yuan. For the first time, we introduced the 2025 net profit forecast of 350 million yuan. Considering the slowdown in traditional business and intense competition for smart driving, we lowered the target price by 28.6% to 10 yuan (2024 SOTP), which has 35.5% upside compared to the current stock price.
risks
Competition in the autonomous driving and high-precision map industry continues to intensify; participating companies continue to lose money.