23Q4 net profit after deducting non-return to mother reached a record high. According to Huayu Auto's 2023 annual report, the company achieved revenue of 168.59 billion yuan for the full year of 2023, +6.5% year-on-year; of these, 23Q4 revenue was 47.04 billion yuan, +4.6% year-on-year, and +5.5% month-on-month. For the full year of 2023, the company obtained net profit deducted from mother of 6.5 billion yuan, +0.6% year-on-year; of these, 23Q4 deducted 2.36 billion yuan, +7.4% year-on-year, and +34.8% month-on-month.
Neutralization continues to advance. According to aggregated statistics in 2023, 53.82% of the company's main business revenue came from vehicle customers outside SAIC Motor Group, and the share of revenue from outside vehicle customers continued to rise. Tesla Shanghai, FAW-Volkswagen, BYD, Chery, BMW Brilliance, Changan Ford, Geely, Changan Automobile, GAC Passenger Vehicle, and JAC became the top ten domestic OEM customers in terms of the company's revenue share.
The core sector contributed significantly to the performance. According to the company's annual report, the main subsidiary Yanfeng Automotive Trim Systems Co., Ltd. had revenue of 109.3 billion yuan in 2023, operating profit of 4.5 billion yuan, and net profit attributable to shareholders of the parent company of 3.4 billion yuan. Bosch Huayu Steering Systems Co., Ltd. already has full-spectrum steering system R&D and production support capabilities. In 2023, it has supplied 7.1 million sets of electric steering system products, including about 1.44 million sets for various types of new energy vehicles. The company's interior and exterior parts and functional parts sectors contributed 4.43 billion and 2.46 billion dollars in net profit respectively, accounting for more than 95%.
The dividends are stable. According to Huayu Auto's 2023 equity distribution plan, it is proposed to distribute 7.5 yuan for every 10 shares, for a total cash dividend of 2,365 million yuan.
According to Huayu Auto's annual report, the company strives to achieve consolidated revenue of 1706 billion yuan in 2024, and on this basis, operating costs will be kept within 148.5 billion yuan.
We expect the company's 2024/25/26 revenue to reach 1805/1869/193.7 billion yuan, net profit to mother of 81.9/88.9/9.64 billion yuan, corresponding EPS of 2.60/2.82/3.06 yuan. The corresponding PE corresponding to the closing stock price on March 29, 2024 was about 6.4/5.9/5.5 times. We believe that the company's intelligent electrification support is progressing steadily, giving the company a reasonable PE range of 8-10 times in 2024, corresponding to a reasonable value range of 20.79-25.99 yuan. Maintain an “better than the market” rating.
Risk warning: Economic growth falls short of expectations, and raw material prices have risen sharply.