The profit growth rate was impressive, and the gross and net margin improved markedly
24Q1 achieved revenue of 1.41 billion yuan, +7.9% year on year, net profit to mother of 59 million yuan, +177.6% year on year, deducted non-net profit of 58 million yuan, +230.8% year over year, of which non-recurring profit and loss were 440,000 yuan, showing impressive profit growth.
Business restructuring led to an increase in gross margin. We are optimistic that gross margin will continue to improve in Q2. The overall gross margin in 24Q1 is 12%, an increase of 1.5 pct over the previous year. We believe it is mainly due to the increase in the share of the automotive lightweight business leading to an increase in gross margin. The company changed the original system door and window fund-raising project to a “deep processing technology transformation project with an annual output of 20,000 tons of aluminum alloy profiles and 2 million sets of components”. It is expected to be completed and put into operation in 24, and the automotive lightweight business is expected to grow further after production. The average settlement price of raw aluminum futures in 24Q1 was 1,9055 yuan/ton, an increase of 509 yuan/ton over the previous year, an increase of 2.7%. As of April 16, the settlement price of aluminum futures was 20,415 yuan/ton. Since April, the average price of aluminum has increased 8.7% year on year. Looking forward to Q2 gross margin, there may still be some room for improvement.
Improved cost management capabilities and accelerated inventory turnover
The cost rate for the 24Q1 period was 7.84%, down 1.14pct year on year. Sales, management, R&D, and finance expenses were 1.53%, 1.59%, 2.99%, and 1.72%, respectively. The year-on-year changes were -0.33pct, -0.13pct, -0.17pct, and -0.51 pct, and the cost control effect was good. Asset and credit impairment losses were $06 billion, up $01 million year on year; net interest rate increased 2.55 pct year on year to 4.13% under the combined impact. The net CFO of 24Q1 Company was -66 million, and the current payout ratios were 90.40% and 104.00%, respectively. The year-on-year change was +3.62 pct and +15.01 pct. The number of inventory turnover days was 50.5 days, 9 days faster than the previous year.
Optimistic about the company's system door and window & automobile lightweight two-wheel drive, maintaining the “buy” rating, the company will continue to increase investment and market development efforts in the lightweight automobile business and system door and window business, increase the share of the automobile lightweight business and system door and window business in the company's business. It plans to replace some low-margin traditional industrial material products by increasing the sales of lightweight automotive materials, and strengthen the system door and window brand building to further optimize and enrich the product line. We are optimistic about the company's system doors and windows & lightweight two-wheel drive. We expect the company to achieve net profit of 2.4/3.1 billion yuan in 24-26, corresponding to PE of 17, 13, and 10 times, and maintain a “buy” rating.
Risk warning: The implementation of lightweight automobile production capacity fell short of expectations; the decline in real estate affected sales of the door and window business; and the price of raw materials increased dramatically.