Incident Overview
The company released its 2024 quarterly report, with 24Q1 revenue of 1,259 billion yuan, up 22.86% year on year, down 7.7% month on month, net profit of 170 million yuan, up 111.26% year on year, up 4.29% month on month, net profit after deducting 158 million yuan, up 156.73% year on year, up 8.97% month on month, gross profit margin 36.95%, up 4.77 pct year on month, down 0.01 pct month on month, net profit margin 15.65%, up 5.84 pcts year on year, up 1.59 pct month on month.
The 24Q1 off-season was not easy, and gross margin increased significantly year-on-year
The first quarter is generally a traditional low season, but the company's performance in the first quarter basically continued the trend of the peak season in the second half of '23. Among them, revenue in January hit a record high in a single month, revenue in February was affected by the Spring Festival holiday, and revenue growth resumed in March. The gross profit margin was 36.95%, up 4.77pct year-on-year, mainly due to the smooth development of business in the fields of precision electronic components and new applications, increased market orders, and continuous increase in capacity utilization, leading to an increase in profit margins.
Continue to develop new businesses and inject new momentum into growth
1) Automotive electronics field: The company has been in the field of automotive electronics for many years. The depth and breadth of cooperation with major strategic customers continues to increase, and new projects for high-end customers continue to be promoted smoothly. The company's automotive electronics products are used in a wide range of fields, covering automotive battery management systems, intelligent driving systems, OBC, vehicle networking, headlight control systems, motor management systems, body control systems, smart cockpits, thermal management systems, etc. The automotive electronics business will lay a solid foundation for the company's long-term steady growth. 2) Photovoltaic energy storage: After years of deep cultivation, it has now been recognized by domestic and foreign industry benchmark enterprises. The company has successfully developed special new high-power components, continuously innovated products and technology, optimized business models, integrated resources, and prepared for the rapid development of the industry after breakthroughs. 3) Data center: AI development challenges inductive components for power management. The company's products can continue to meet the growing needs of high-end customers and have been continuously recognized by high-end customers. The large-scale application of computing power is booming. Various electronic products related to information interaction, processing, and calculation will bring a huge incremental market and new application scenarios to the company, which is expected to become an important driving force for the company's growth in the future.
Investment advice
We expect the company's net profit for 2024/2025/2026 to be 95/12.27/1,561 million yuan, respectively. According to the 2024/4/15 closing price, PE is 22.1/17.1/13.5 times, maintaining a “buy” rating.
Risk warning
New production capacity falls short of expectations, downstream demand falls short of expectations, risk of insufficient funding for project construction in a timely manner, and risk of fluctuations in the surrounding environment.