Performance summary: The company announced its 2023 results. For the full year of 2023, the company achieved revenue of 86.150 billion yuan, +44.77%, of which heavy truck/ light truck/ engine sales revenue was 748.31/88.28/ 620 billion yuan, respectively, +50.27%/+16.31%/-17.77% year-on-year; 2023H2 achieved revenue of 41.685 billion yuan, +6.67% year-on-year, and heavy truck/engine sales revenue of 389.48/ 4,437/304 million yuan, +50.20%/+32.72%/-23.64% year-on-year respectively, and +8.54%/+1.05%/-3.73% month-on-month respectively; the H2 heavy truck business grew rapidly and performed well.
The marketing management fee rate declined year on year, and the ability to control expenses was highlighted. For the full year of 2023, the company's overall gross margin was 16.65%, -0.2pct, and sales/management expense ratios were 4.68%/ 5.46%, respectively. The year-on-year decline in gross margin was mainly due to a decrease in financial business revenue contributions with higher profit margins, proper management expenses control, and a significant year-on-year improvement in management expenses; 2023H2's gross margin was 16.35%, and -0.5/-0.6 pct, respectively. Sales/management expenses rates were 4.64%/5.91%, respectively -0.2/- 2.1pct, -0.1/+0.9pct month-on-month, respectively. In 2023, the company's heavy truck sales volume was 227,000 units, +43.9% year-on-year, of which domestic/export sales were 9.69/130,000 units, +40.0%/+46.9% year-on-year respectively. Domestic sales and exports combined to drive the company's heavy truck sales growth. In 2023, the operating profit margins of the company's heavy truck/engine/financial business were 5.8%/14.2%/55.6%, respectively, +0.6/+13.7/+15.7pct, respectively, and the operating loss rate of the light truck business was 6.0%, and -1.9pct year-on-year. 2023H2's heavy truck operating profit was 19.98 billion yuan, operating profit margin was 5.13%, +1.12/-1.47pct month-on-month, and profit margins declined month-on-month compared to 2023H1. 2023H2's heavy truck sales volume was 118,000, of which overseas accounted for 54.92%, or -4.96pct month-on-month.
Outlook: With strong product strength as a starting point, the company continues to optimize and enhance its competitiveness in domestic and overseas markets.
Driven by factors such as the overall improvement in macroeconomic performance and the recovery in demand for heavy logistics trucks, compounded by the strong momentum maintained by exports, the recovery situation in the heavy truck industry is obvious. The company will seize international market opportunities, increase its share in high-end markets such as the Middle East and Latin America, and establish competitive advantage in high-end market segments dominated by European and American brands; accelerate the development of key products to ensure that typical models lead the industry in various aspects such as dynamics, economy, wind resistance coefficient, and fatigue life; focus on market segments such as gas vehicles and high horsepower to ensure continuous growth in market segments, accelerate product optimization, upgrading and structural adjustment, and accurately implement marketing strategies to drive continuous growth in production and sales and further increase profitability.
Profit forecast and investment rating: In view of the company's good export profit performance and continuous optimization of the product structure, we maintain the company's forecast net profit of 68.13/7.813 billion yuan from 2024 to 2025, corresponding to EPS of 2.47/2.83 yuan respectively, corresponding to PE valuations 7.42/6.47 times, respectively, maintaining a “buy” rating.
Risk warning: Macroeconomic fluctuations at home and abroad have exceeded expectations; price increases for upstream raw materials have exceeded expectations.