Event: On April 15, the company released its 2023 Annual Report and 2024 Quarterly Report. In 2023, we achieved revenue of 12.110 billion yuan, +6.4% year on year, net profit of 1.08 billion yuan, +43.7% year on year; in the first quarter of 2024, we achieved revenue of 3,061 billion yuan, +6.31% year over year, and net profit to mother of 278 million yuan, +31.97% year on year.
Four-wheeler product structure continues to improve, two-wheeler exports are impressive, and growth is steady in 2023:
The company's revenue in 2023 was 12.110 billion yuan, +6.4% year-on-year, and maintained steady growth. Among them: 1) four-wheeler sales revenue was 6.504 billion yuan, -4.88% year-on-year, mainly due to the company's delay in delivery of new products and inventory adjustments, and sales volume decreased -12.1% year over year; 2) Domestic sales revenue of two-wheelers was 2,189 billion yuan, +8.63% year over year, mainly due to the strong strength of the company's two-wheeler products. Against the backdrop of a decline in domestic sales of medium and large motorcycles, it still achieved a contrarian increase; 3) Two-wheeler external sales revenue was 22.91 billion yuan 100 million yuan, same Compared to +78.22%, export sales achieved rapid growth, mainly due to the company's active improvement of overseas channels and product layout. The company's comprehensive gross margin in 2023 was 33.50%, +8.13pct year on year, mainly due to: 1) the four-wheeler product structure continued to improve, and the share of high-end U/Z series increased. The average sales price of four-wheelers in 2023 was 44,400 yuan, +8.2% year-on-year; 2) the domestic two-wheeler product structure upgrade, and the company successively launched new high-displacement products such as 450SR S/450NK/ 450CLC in 2023, which led to an improvement in gross margin; 3) the impact of the exchange rate, the RMB depreciation in 2023 made a positive contribution. The company's expense ratio for the 2023 period was 21.81%, +5.73pct year on year. The large year-on-year increase was mainly due to an increase in sales and R&D expenses. The company achieved net profit of 1,008 billion yuan in 2023, +43.7% year-on-year.
On a quarterly basis, the company achieved revenue of 2,724 billion yuan in 2023Q4, -0.9% year-on-year, and -5.4% month-on-month, mainly due to the company removing inventory and adjusting the pace of new product shipments. The company achieved a comprehensive gross profit margin of 35.53% in 2023Q4, +4.61% year-on-year, and +1.86% month-on-month, mainly due to the impact of product structure. The company's expense ratio for the 2023Q4 period was 22.5%, -3.8pct year on year and -0.3pct month-on-month. The large year-on-year decline was mainly due to a decrease in sales and financial expenses. The company achieved net profit of 206 million yuan in 2023Q4, +57.0% year over year and -17.7% month on month.
The results of two-round and four-round business expansion, cost reduction and efficiency are remarkable, and 2024Q1 has excellent performance:
The company achieved revenue of 3,061 billion yuan in 2024Q1, +6.31% year-on-year, and maintained steady growth, mainly due to:
1) The two rounds of overseas sales continued, and the two rounds of exports maintained high growth; 2) The company maintained a relatively rapid growth in domestic sales with competitive fist products such as 450SR, 450CLC, and 800NK as fulcrums.
The company achieved a comprehensive gross profit margin of 32.52% in 2024Q1, -1.64pct year on year, mainly due to changes in product structure due to popular sales of two-wheelers. The company's expense ratio for the 2024Q1 period was 19.65%, -5.71 pct year on year and -2.16 pct month on month, a significant improvement. Among them, the sales expense ratio and financial expense ratio were 10.40%/-2.15%, respectively, and -4.33pct/-2.05pct year over year respectively. The decrease in sales expenses was mainly due to inventory returning to a healthy level and reduced promotional activities. The decrease in financial rates was mainly due to the impact of exchange profit and loss. The company achieved net profit of 278 million yuan in 2024Q1, +32.0% year-on-year and +34.8% month-on-month, with excellent performance.
Deeply involved in all-terrain vehicles and medium to large motorcycles, and high-end and globalization help the company grow rapidly:
We believe that multiple factors will drive the company's high future performance growth: 1) The company has formed a strong technical accumulation in the fields of engines, frames, etc., and will accelerate the layout of high-end four-wheeler products in the future. These new products have strong competitive advantages, and the market share of high-end four-wheeler products is expected to continue to increase in the future; 2) The market share of medium and large motorcycles is strong, and globalization has achieved excellent results. As the company gradually improves its overseas product and channel layout, export sales are expected to maintain a high rate of growth. Growth; 3) Strong product polishing capability is the core characteristic of the company. The success rate of launching new products in the past was very high. In 2024, with the release of new products such as 150SC/450MT/500SR/675SR, the company will usher in a two-wheeler product cycle, and the domestic market share is expected to continue to increase.
Investment advice: We expect the company's net profit for 2024-2026 to be 1.16 billion yuan, 15.2 billion yuan, and 1.84 billion yuan, respectively, corresponding to the current market value. PE is 18X, 14X, and 12X, respectively. Considering the company's excellent performance in Q1 2024, and 2024 is the company's product year, and new products are expected to be popular, we gave the company 25 times PE in 2024, corresponding to a 6-month target price of 192.5 yuan/share, maintaining a “buy-A” investment rating.
Risk warning: The pace of new car launches falls short of expectations, the risk of changes in the external environment such as exchange rates and freight rates, and the risk of changes in the trade environment between China and the US.