Introduction to this report:
High sales of heavy natural gas trucks, batch supply to large passenger car customers, and implementation of the new national standard drove a high revenue increase in 2023, and net profit to mother turned a loss into a profit.
Key points of investment:
Maintain an “Overweight” rating. According to the company's performance report, we lowered the company's 2023 net profit forecast of 0.43 million yuan (originally 0.54) million yuan, and maintained the 2024-2025 net profit forecast of 1.32/160 million yuan, corresponding EPS of 0.36 (original 0.45) /1.10/1.33 yuan, respectively. The national standard boosts capacity and expands the exhaust catalyst market. The company has a rich product line, maintains a target price of 44.35 yuan, and maintains an “increase” rating.
The company's revenue for 2023 is expected to increase 245% year-on-year, and net profit to mother turned a loss into a profit. 1) The company released the 2023 performance report. The revenue for 2023 is expected to be 1,544 billion yuan, an increase of 245% over the previous year; net profit to mother was 42.58 million yuan, turning a loss into a profit. 2) The main reason for revenue growth was the explosion of the heavy natural gas truck market, batch supply for major passenger car customers, and the impact of the full implementation of diesel non-road national 4 and light vehicle national 6 b emission regulations. The operating income of all major product lines of the company's motor vehicle exhaust purification catalysts achieved a significant increase. Combined with the steady progress of the company's new business, the company's revenue increased sharply in 2023.
In 2023, the sales volume of heavy natural gas trucks increased by 307% year-on-year, driving the company's catalyst sales to increase. In 2023, sales of heavy natural gas trucks totaled 150,000 units, an increase of 307% over the previous year. The company's natural gas heavy truck catalysts have been supplied in batches to the downstream leaders FAW Jiefang, Sinotruk, and Yuchai. The high concentration of terminal natural gas heavy truck sales has led to an increase in the company's natural gas heavy truck catalyst sales.
New diesel emissions regulations for non-road and light vehicles have been implemented, the exhaust catalyst market has been further expanded, and passenger cars have achieved mass supply to large customers. At present, the emission limits for major pollutants in China's new motor vehicles and non-road mobile machinery have decreased by an average of 20% to 40% compared to the previous stage. The increase in emission standards has led to an increase in the use of bicycle catalysts, and the corresponding sales volume of the company's catalyst products has increased. At the same time, the company announced that the number of models has continued to increase in the past three years, and has continued to participate in the certification of new models. Passenger cars have been delivered in batches to large customers.
Risk warning: Risk of fluctuations in raw material prices, risk of large fluctuations in energy prices.