Bethel released its 2023 annual report. In 2023, it achieved revenue of 7.47 billion yuan, +35% year-on-year; realized net profit to mother of 890 million yuan, +28% year-on-year, with a net profit margin of 12.2%. The fourth quarter of 2023 achieved operating income of 2.37 billion yuan, an increase of 28% year on year; net profit to mother was 30 billion yuan, up 34% year on year, net profit margin 12.8%, +0.83 pct year on year, and 0.61 pct month on month.
Market development efforts have been stepped up, and the entire product line has abundant reserves of research projects. In 2023, the total number of new fixed-point projects was 319, including: 1) Electronic Parking Brake Systems (EPB): 65 projects under development, including 43 new energy models; 33 new mass production projects, including 28 new energy models; and 47 new targeted projects, including 33 new energy models. 2) Line Control System (WCBS): 66 projects under development, including 49 new energy models; 25 new mass production projects, including 18 new energy models; 50 new targeted projects, including 42 new energy models. 3) Electric power steering system (EPS): 13 projects under development, including 9 new energy models, 12 new mass production projects, including 6 new energy models and 8 new targeted projects, including 7 new energy models.
Continue to increase investment in R&D and steadily promote the development and mass production delivery of new products. WCBS completed the planning of the system architecture and technical approach; the WCBS1.5 technology platform completed design, development and performance testing; the front wet and rear drying technology solutions were approved by customers; the fixed clamp completed development and operation; four-wheel EHC products and large bore EPB completed development and commissioning; and the EMB development project was well received by customers.
Profit forecast and investment advice: Bethel is currently one of the few independent brands in China that has independent intellectual property rights and can mass-produce various types of intelligent electronic control products. It has abundant reserves of research projects and is steadily promoting the development and mass production delivery of new products. We expect the company's revenue for 2024-2026 to be 97/120/151 billion yuan, net profit to mother of 12/16.21 billion yuan, and EPS of 2.83/3.69/4.80 yuan respectively. Referring to comparable companies, the company was given 25-30 x PE in 2024, corresponding to a reasonable value range of 70.71 to 84.85 yuan, maintaining a “superior to the market” rating.
Risk warning: Global passenger car sales have fallen short of expectations, and raw material prices have risen sharply.