Incident: Kodali released its 2023 annual report, achieving operating income of 10.511 billion yuan, an increase of 21.47% over the previous year; net profit to mother was 1,2001 billion yuan, an increase of 33.47% over the previous year. Looking at a single quarter, the company's 23Q4 revenue was 2,743 billion yuan, up 2.22% year on year, down 3.79% month on month; net profit to mother was 406 million yuan, up 31.91% year on year, up 41.82% month on month.
Comment:
The amount of lithium battery structural parts is increasing steadily, and the growth rate of automobile structural parts is impressive. In 2023, the company's sales volume of lithium battery structural parts products increased 3.46% year on year, lithium battery structural parts revenue was 10.064 billion yuan, up 20.87% year on year, gross margin was 24.14%, down 0.25pct year on year. The company maintained stable profit by exchanging price for volume and cost reduction and efficiency; the automotive structural parts business grew significantly, achieving revenue of 427 million yuan, an increase of 45.06% year on year, and gross margin of 9.86% year on year, up 2.01 pct year on year.
The net interest rate increased in 23Q4, and profitability showed strength. In 2023, the company's net interest rate was 11.59%, an increase of 1.04pct over the previous year. Under price reduction pressure, it achieved a steady increase in profitability through material cost reduction, automation upgrades, etc. Looking at the single quarter, the 23Q4 company's gross profit margin was 24.28%, up 0.40 pct month-on-month, down 0.10 pct; expenses improved and other earnings increased during the single quarter. The 23Q4 net interest rate was 15.04%, up 4.79 pcts month-on-month, and 3.40 pct year-on-year.
Overseas revenue doubled in '23, and the European base is expected to contribute to resilient performance. The company's overseas revenue in 2023 was 534 million yuan, up 118.27% year on year. The revenue growth rate was significantly higher than that of domestic business. Future overseas business expansion is expected to increase performance. The company has set up 3 overseas production bases in Hungary, Germany and Sweden. Among them, the German and Swedish bases are in the trial production stage for supporting customers; the Hungarian production base has reached full production.
Profit forecast, valuation and rating: Due to the impact of price cuts in the structural parts industry and the rise in overseas bases, the 24-25 net profit forecast was lowered to 1,418/1,887 billion yuan (2%/7% reduction, respectively), and the net profit forecast for 2026 was 2,267 billion yuan. The PE corresponding to the current stock price is 18/13/11 times. Considering that the company is a leader in structural components and has excellent profitability, the overseas layout is expected to enter a harvest period and maintain a “buy” rating.
Risk warning: power and energy storage fall short of expectations; competition exacerbates the decline in profits; risk of changes in technology routes.