Matters:
The company released its 2023 annual report. In 2023, the company achieved operating income of 168.59 billion yuan (+6.5% YoY), net profit attributable to mother of 7.21 billion yuan (+0.15% YoY), and net profit of 6.50 billion yuan (+0.6% YoY).
The company's 2023 dividend plan is to pay a cash dividend of 7.50 yuan (tax included) for every 10 shares.
Ping An's point of view:
Various business segments performed steadily. According to the company's financial data, in 2023, the company's main business revenue reached 159.52 billion yuan, up 6.7% year on year. Apart from the metal forming and mold business, which fell 14.1%, all other business segments maintained steady growth. The revenue of the interior and exterior parts and functional parts business reached 113.07 billion yuan/28.54 billion yuan respectively, with year-on-year growth rates of 8.6%/5.7% respectively. In 2023, the company's domestic and foreign revenue reached 128.44 billion yuan/31.08 billion yuan respectively, up 6.2%/8.5% year-on-year respectively. There is a big difference between domestic and foreign gross margins. The gross margin of the domestic business reached 14.9%, while the gross margin of the foreign business was only 3.2%.
The profit of the interior and exterior parts and functional parts business continued to grow steadily. Judging from the profit contributions of various sectors, the interior and exterior parts and functional parts business is the company's profit pillar. The net profit of the two major sectors reached 4.43 billion/2.46 billion yuan respectively in 2023, up 1.9%/3.0% year-on-year respectively. The profit contribution of the two major sectors accounted for 95.5% of the company's net profit for the whole year. In addition, the company's net profit from metal forming and molds, electronic and electrical components, and heat-processed parts in 2023 was 410 million/-80 million/-0.1 billion yuan, respectively. Among them, the net profit of electronic and electrical components fell 126.9% year-on-year, mainly due to the sale of 27% equity income from the sale of Shanghai Valeo Automotive Motor Wiper Systems Co., Ltd. during the same period in 2022.
The improvement in the customer structure has paid off. According to the annual report, according to aggregated statistics in 2023, 53.82% of the company's main business revenue came from vehicle customers outside of 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, Guangzhou Automobile Passenger Vehicle, and JAC became the top ten domestic OEM customers. In 2023, among the new business life cycle orders obtained by the company, NEV-related models accounted for more than 65% of the supporting amount, and domestic independent brands accounted for more than 40% of the supporting amount.
Profit forecast and investment advice: In recent years, we have maintained steady operating performance based on the decline in sales of SAIC Motor Group's joint ventures, reflecting the remarkable results of the company's neutralization strategy. According to the latest situation, we adjusted the company's net profit forecast for 2024-2025 to 7.54 billion yuan (the original net profit forecast was 7.45 billion yuan/8.76 billion yuan), and added the company's net profit forecast for 2026 to 8.26 billion yuan. As a domestic auto parts leader, the company has a high voice in the industrial chain. The core business has achieved autonomy and control, the valuation is low, and the company's “recommended” rating is maintained.
Risk warning: 1) Production and sales volume in the automotive industry falls short of expectations, which will cause the company's performance to fall short of expectations; 2) The company is greatly affected by SAIC Motor Group's production and sales. If SAIC Motor Group's sales volume falls short of expectations, it will affect the company's performance; 3) The company's expansion to customers outside of SAIC Motor Group falls short of expectations; 4) Fluctuations in raw material prices affect the company's profitability.