Incident: The company released its 2023 annual report. In 2023, the company achieved operating income of 8.074 billion yuan, an increase of 18.08% over the previous year, and realized net profit of 816 million yuan, an increase of 40.26% over the previous year.
Among them, the company achieved operating income of 2,02 billion yuan in the single quarter of 2023Q4, up 9.42% year on year, with a slight increase of 0.73% month on month; net profit to mother in the single quarter was 227 million yuan, up 31.51% year on year, up 2.71% month on month. The company's overall 2023Q4 performance was in line with our expectations.
2023Q4 performance was in line with expectations, and profitability increased month-on-month. On the revenue side, the company achieved revenue of 2.02 billion yuan in a single quarter of 2023Q4, an increase of 0.73% over the previous quarter. Looking at the main downstream, in 2023Q4, 2,956 million new energy passenger vehicles in the narrow sense of the term were sold, an increase of 24.97%; of these, A0 grade and above pure electric passenger vehicles were wholesale of 1.593 million units, an increase of 18.44% over the previous month; and 9663,700 plug-in hybrid passenger cars were sold, an increase of 27.31% over the previous month. The domestic heavy truck industry achieved wholesale sales of 204,400 vehicles in 2023Q4, a decrease of 6.32% over the previous month. In terms of gross margin, the company's comprehensive gross margin for the 2023Q4 single quarter was 24.58%, up 2.14 percentage points year on year and 2.88 percentage points month on month. In terms of the cost rate for the period, the company's 2023Q4 expenses ratio was 12.10%, up 2.72 percentage points from month to month. Among them, 2023Q4 sales/management/R&D/finance expenses rates were 1.22%/4.88%/5.51%/0.49%, respectively, and +0.33/+1.38/+1.13/ -0.12 percentage points, respectively. In terms of net profit to mother, the company achieved net profit to mother of 227 million yuan in a single quarter of 2023Q4, an increase of 2.71%. The corresponding net profit margin to mother was 10.31%, an increase of 0.20 percentage points over the previous quarter.
The leading electric drive gear is always strong, and robot reducer+Minsheng gear opens up room for long-term growth.
As the electrification rate of passenger cars continues to rise, the automotive gear market pattern is being reshaped, and the trend of gear outsourcing is becoming more and more obvious. As a leader in electric drive gears, Shuanghuan has obvious competitive advantages in technology research and development, equipment production capacity, and customer resources, and will continue to benefit from the increase in the electrification rate of the industry in the future.
In terms of speed reducers, speed reducers are the core components of industrial robots, and account for a large share of value. Shuanghuan has been deeply involved in precision speed reducers for industrial robots for many years, has gradually achieved full coverage of precision reducers required for 6-1000KG industrial robots, and has also provided domestic first-line robot customers. Revenue from the deceleration business will continue to grow in the future. In terms of Minsheng Gear, the company established Environmental Drive Technology to deploy Minsheng Gear and acquired Sanduole to help develop the Minsheng Gear business. Sanduole's main products include precision gears, plastic gear speed reducers, auto parts and functional assemblies, and cover a wide range of downstream high-quality customers.
Profit forecast and investment rating: We maintain the company's 2024-2025 net profit forecast of 1,003 billion yuan and 1,253 billion yuan respectively. We expect the company's net profit to be 1,528 billion yuan in 2026, corresponding to EPS of 1.18 yuan, 1.47 yuan, and 1.79 yuan, respectively. The price-earnings ratio is 18.38 times, 14.71 times, and 12.06 times, respectively, maintaining the “buy” rating.
Risk warning: New energy passenger car sales fall short of expectations; impact of raw material price fluctuations; new business development falls short of expectations; merger and acquisition integration falls short of expectations.