Incident: The company announced a pre-increase in its 2023 annual results. It is estimated that net profit due to mother will be 96-1.06 billion yuan in 2023. Compared with the same period last year, it will increase 259-359 million yuan, +36.88%-51.13% year over year. The estimated net profit without return to mother is 924-1,024 million yuan, +15.97%-28.52% year-on-year.
The performance forecast is in line with expectations.
Looking at Q4 alone, the company achieved net profit of 158-258 million yuan, +20.75%-97.04% year-on-year. It is estimated that net profit without return to mother is about 156-256 million yuan, or +54.04%-152.56% year-on-year. High performance growth was achieved. The company's performance in terms of main business is steady. The global layout is progressing smoothly, the product market share is expanding, and the sales ratio of high-value-added products is constantly increasing. At the same time, production efficiency and cost management have been strengthened, and the overall cost level has declined, leading to steady growth in sales and profits. Furthermore, since the company's export products are mainly settled in US dollars, the increase in exchange rates and the decline in international shipping costs have further released the company's profits, so the company's performance has increased significantly.
Improve the four-wheel product matrix and stabilize the leading export position. In 2022, the company completed the launch of the new CFORCE400, 500, second-generation Trail800, power-enhanced CFORCE625 series, and ZFORCE1000 series. In 2022, all-terrain vehicles achieved sales revenue of 6.838 billion yuan, an increase of 40.14% year over year. The company's all-terrain vehicle exports in 2022 accounted for 74.28% of the domestic export value of similar products, maintaining the leading position and maintaining the highest market share in the European market.
Fuel-powered two-wheelers are constantly being promoted to promote exports, and electric motorcycles are shipped overseas to more than 20 countries. The cumulative sales volume of 2023H1 two-wheelers was 98,700 units, achieving sales revenue of 2,288 billion yuan, an increase of 58.87% over the previous year, 275 new overseas channels, and a cumulative network of 1,445 dealers. Exports continued to grow rapidly. The two rounds of export sales reached 50,800 units, and revenue reached 1,242 billion yuan, an increase of 132.4% over the previous year. In the electric motorcycle sector, the first high-performance electric motorcycle AE8 and MINI bike has been launched. The 2023H1 has added 15 new stores, and a total of 202 channels. It has been shipped to more than 20 countries including Europe, South America, and Southeast Asia, making every effort to build a third business growth curve.
Overseas manufacturing bases help enter the US market, and channels+production line+R&D accelerate the expansion of production capacity. The global all-terrain vehicle market is expected to reach $141 billion by 2025. Currently, the company can compete with leading brands such as Polaris, Bombardier, and Honda in the US. In order to quickly supply the US market, Mexico's overseas manufacturing base mainly produces UTVs. It already has a manufacturing capacity of 50,000 units/year in the first phase, reducing the transportation radius.
The manufacturing base in Thailand mainly produces ATVs, with a monthly output of about 1,000 units. 2023H1 added 31 new channels in the US market, with a total of 585 channels. On August 17, it was announced that the net capital raised was 1.709 billion yuan. It is planned to invest 799 million yuan and 475 million yuan respectively in sports equipment expansion and production line intelligent transformation projects and R&D center upgrading projects, which can be used in March 2024.
Investment advice: The company is expected to achieve net profit of 10.04 billion yuan, 11.82, and 1,411 billion yuan in 2023-2025, respectively, and the corresponding PE is 12.78/10.86/9.1 times, respectively. Covered for the first time, giving it a “Recommended” rating.
Risk warning: Risk of exchange rate fluctuations, increased risk of market competition, risk of new product development and promotion falling short of expectations.