Event Overview: The company released its 2023 annual report: the company's total revenue in 2023 was 744.71 billion yuan, +0.1% year over year; net profit to mother was 14.11 billion yuan, -12.5% year over year; net profit after deducting non-return to mother was 10.05 billion yuan, +11.7% year over year. Among them, 2023Q4 achieved total revenue of 221.36 billion yuan, +2.2% YoY, +12.5%; net profit attributable to mother of 2.70 billion yuan, -22.2% YoY, -37.5% month-on-month; net profit excluding non-return to mother of 570 million yuan, +134.8% YoY and -84.9% YoY.
Expenses and impairment have put a slight strain on profits. The company achieved total revenue of 221.36 billion yuan in 2023Q4, +2.2% year on year, +12.5% month on month; net profit after deducting non-return to mother was 570 million yuan, +134.8% year on year, and -84.9% month on month. On the revenue side, the 2023Q4 listed group sold 1.644 million units, +7.2% year over year, and the revenue growth rate was lower than the sales growth rate mainly affected by the increase in year-end discounts and the decline in bicycle revenue; on the gross profit side, the 2023Q4 gross profit margin was 10.71%, +1.2pct year over year, +0.3 pct month-on-month; it mainly benefited from scale effects and exports promoted gross profit.
On the cost side, 2023Q4 sales/management/R&D/finance cost rates were 4.2%/3.4%/2.8%/-0.2%, respectively, +0.2/+0.4/+0.6/-0.3pct. On the profit side, 2023Q4 net profit to mother was 2.70 billion yuan, -22.2% YoY, -37.5%; net profit margin 1.53%, -1.2pct YoY, -1.9pct month-on-month; net profit net profit of 570 million yuan, +134.8% YoY, and -84.9% month-on-month. The decline in profit was mainly affected by the 2023Q4 fee rate increase and asset and credit impairment losses ($3.47/2.49 billion, respectively). 2023Q4's investment income in joint ventures and joint ventures was about 3.35 billion yuan, +1.5% year over month, corresponding to Volkswagen's Q4 sales volume of 383,000 units (+16.3% month-on-month) and GM 277,000 units (-9.4% month-on-month). Joint venture profits are relatively stable; other non-recurring profits and losses come from government subsidies, illiquid asset disposal gains and losses, etc.
Wuling Starlight has shown impressive performance, and the Zhiji L6 will be launched soon. In 2023, the Group sold 1.123 million new energy vehicles. After its launch in October, Wuling Starlight quickly sold more than 10,000 units per month, with a wholesale sales volume of 20,000 units in January-January '24, becoming the TOP2 in China's 150,000 yuan embedded hybrid car market. Subsequently, the smart smart car Zhiji L6, which has a smart digital chassis and a quasi-900V ultra-fast charging solid-state battery, will be launched on April 8. Zhiji will enter the high-end market and accelerate its autonomous electrification transformation.
It continues to be popular overseas, and the world is vast. Overseas sales for the full year of 2023 reached 1.208 million vehicles, +18.8% year-on-year. The growth trend is good, with independent brands accounting for 92% and new energy accounting for 24%. In January-February 2024, overseas sales reached 121,000 units, -24.27% year-on-year. Subsequently, SAIC Motor will launch 14 new smart electric “global vehicles” in overseas markets, further expanding the overseas product matrix, which is expected to help further increase overseas sales.
Investment suggestions: The company has solid underlying technology, excellent platformization capabilities, and adjusted profit forecasts. It is estimated that 2024-2026 revenue is 7,678/8,023/828 billion yuan, net profit to mother of 154.50/169.33/18.455 billion yuan, corresponding to EPS 1.33/1.46/1.59 yuan, corresponding to the closing price of 15.07 yuan/share on March 29, 2024, PE is 11/10/9 times, respectively, maintaining the “recommendation” ” Ratings.
Risk warning: downside risk in the car market; downside risk of joint venture brands; launch of new electric smart models falling short of expectations; overseas expansion falling short of expectations.