Event: The company released the 2023 Annual Results Report & First Quarter 2024 Earnings Forecast. In 2023, the company expects to achieve total revenue of 17.25 billion yuan, an increase of 15.7% over the same period of the previous year; net profit to mother is estimated to be 1.13 billion yuan, an increase of 17.0% over the same period of the previous year. 2024Q1 expects to achieve net profit of 3.2 to 380 million yuan, an increase of 22.0%-44.8% year on year; it is expected to deduct non-net profit of 2.7 to 330 million yuan, an increase of 25.6%-53.5% year on year.
Comment:
Focusing on the core strategy of the intelligent chassis system, the company's profit achieved steady growth. The company continues to develop steadily around the goal of “global modular management, technological iterative upgrading, and industrial reinforcement and complementation”. Traditional businesses have maintained steady growth, and incremental businesses such as air suspension systems, lightweight chassis systems, and thermal management systems have continued to grow, and the development momentum is good. In 2023, the company expects to achieve total revenue of 17.25 billion yuan, an increase of 15.7% over the same period of the previous year; it is expected to achieve net profit of 1.13 billion yuan to mother, an increase of 17.0% over the same period last year. 2024Q1 expects to achieve net profit of 3.2 to 380 million yuan, an increase of 22.0%-44.8% year on year; it is expected to deduct non-net profit of 2.7 to 330 million yuan, an increase of 25.6%-53.5% year on year.
The smart chassis business maintained rapid growth, and the cooling system performed well. The company caters to the development trend of intelligent automobiles and actively continues to promote the implementation and growth of the incremental business of air suspension systems, lightweight chassis systems, and fluid piping systems. 2023 H1 air suspension system business revenue of 360 million yuan (+19.3% year over year), accounting for 4.4% of revenue (year-on-year -0.2pct); lightweight business revenue of 550 million yuan (+18.0% year over year), accounting for 6.8% of revenue (-0.4 pct year over year); rubber business revenue of 1.75 billion yuan (+17.4% year over year), accounting for 21.4% of revenue (-1.3 pct year over year); cooling systems business revenue of 2.56 billion yuan (+43.3% year over year), accounting for 31.2% of revenue (year-on-year + +) 4.1 pct); Seals business revenue was 1.75 billion yuan (+23.0% year over year), accounting for 21.3% of revenue (-0.3 pct year over year).
The internationalization strategy is gradually entering a harvest period, and overseas technology has been implemented domestically. 1) Air suspension system:
AMK China has obtained air supply unit orders from many new domestic car builders and traditional independent brands. As of the beginning of '24, Anhui Amico had received orders with a total output value of about 10.4 billion yuan; the subsidiary Dingyu Technology focuses on the research and development of air springs. Currently, air spring products have been produced, production line equipment has been implemented, and related business cooperation is being accelerated. At the same time, the company is also speeding up the development of hardware assembly products for other airborne systems. 2) Lightweight chassis: The core technology of the subsidiary, Sichuan Wangjin, is a ball hinge assembly product. The forged aluminum control arm assembly project has made breakthrough progress; it has received orders from many traditional OEMs such as Mercedes-Benz, Changan, GAC, and BYD. 3) Cooling system: TFH China has now completed the establishment and has begun to expand the domestic market; its subsidiary Zhongding Fluid is leading the development of the new energy temperature control system assembly business, actively arranging other thermal management products such as liquid cooling plates, and is actively promoting the implementation of related products. 4) Sealing systems: Actively promoting the new energy layout, we have successfully developed and supported high-performance new energy motor seals; we have developed and mass-produced products such as new energy battery module sealing systems and electric bridge assemblies to support new energy vehicle platforms such as Volvo, NIO, SAIC, and GAC.
Profit forecast and investment rating: The company is a leading domestic automobile chassis leader. It actively promotes the implementation of overseas technology domestically, and its performance is expected to grow rapidly. We expect the company's net profit to be 11.3 billion yuan, 13.7 billion yuan, and 1.64 billion yuan in 2023-2025, corresponding to PE of 15, 12, and 10 times, respectively, maintaining a “buy” rating.
Risk factors: Fluctuations in raw material prices, exchange rate fluctuations, customer development falls short of expectations, and sales of supporting models fall short of expectations.