Incident: In 2023, the company achieved revenue of 1,881 billion yuan, +10.3% year over year; realized net profit of 51 million yuan, +10.7% year over year; realized deduction of non-net profit of 43 million yuan, +44.0% year over year. 4Q23 achieved revenue of 552 million yuan, +13.5%/+15.4% month-on-month; realized net profit of 0.2 billion yuan, +162.4%/+120.0% month-on-month; realized deducted non-net profit of 121 million yuan, reversing losses of 0.25 million/ +144.5%, respectively.

1. Revenue side: Steady revenue growth in 2023, and the release of lightweight & high-precision parts products.

In 2023, the company achieved revenue of 1,881 million yuan (+10.3% YoY), and 4Q23 achieved revenue of 552 million (+13.5%/+15.4%, respectively), mainly due to the steep rise in mass production in the aluminum alloy lightweight sector and the steady rise in the high-precision chassis parts business. In 2023, the sales volume of aluminum alloy lightweight/high-precision chassis parts was +142.9%/+28.5% year-on-year, respectively, and the main revenue was +182.1%/+16.8% year-on-year.

2. Profit side: The overall gross margin of the company increased in 2023, and credit impairment contributed significantly to profits. 1) Gross profit margin: 2023, the company's gross margin was 17.4% (+0.3 pct year on year), mainly due to factors such as the release of production capacity in the company's chassis parts and aluminum alloy business, reduction in raw material costs, and increased production efficiency; 4Q23 the company's gross margin was 16.3% (-1.3 pct/-1.8 pct, respectively); 2) Cost ratio: 2023, the company's four cost rates were +0.7 pct year on year, of which the management cost ratio was +0.8 pct year over year, mainly due to fixed expenses such as preparation fees incurred during the production capacity construction process in the aluminum alloy lightweight business sector Increase and increase in daily expenses in various business segments. 4Q23 four expense ratios -0.5pct/month-on-month, respectively; 3) Profit margin: In 2023, the company deducted non-net profit of 43 million yuan (year-on-year +13.25 million), of which credit impairment losses had a positive impact of 27.97 million; in 2023, the company deducted non-net interest rate of 2.3% (+0.5pct year-on-year); 4Q23 companies deducted non-net profit of 121 million (+25.42 million/+12.67 million month-on-month, respectively), of which credit impairment loss factors had a positive impact of 31.18 million/25,548 The deducted non-net interest rate for 10,000 and 4Q23 companies was 3.9% (+4.7pct/+2.1pct, respectively).

Continue to acquire chassis systems, air conditioning compressors, and lightweight projects, and actively lay out the robot business.

1) The company's new chassis components, such as VGR steering gears and active shock absorbers, were designated by customers such as Nexteer, FAW Guangyang, BYD, Mandu, and Marelli; the aluminum alloy lightweight business received new products such as integrated valve terminals and control arms from BYD; electric compressors were targeted by customers such as BAIC Foton, SAIC Chase, BAIC Off-road, and JAC; the integrated thermal management system was targeted by customers such as Foton Daimler and Jirui United Heavy Industries; 2) On a business basis, the company cooperates with customers to promote sample development of screw products for humanoid robots, and the company is deeply involved The production process accumulated in the automotive chassis field is highly homologous to the production process of screw products, and it is expected to be the first to achieve breakthroughs in related technologies.

Investment advice: We expect the company to achieve operating income of 2.08 billion yuan, 2.33 billion yuan and 2.57 billion yuan in 2024, 2025 and 2026, and corresponding net profit of 64 million yuan, 75 million yuan and 94 million yuan. Based on the closing price on April 2, PE will be 88.7 times, 74.9 times, and 60.0 times, maintaining the “increase” rating.

Risk warning: The recovery of the downstream automobile industry falls short of expectations; the mass production process of new projects falls short of expectations; the progress of new product development falls short of expectations; risk of fluctuations in raw material prices