Event: The company released its annual report for '23 and its quarterly report for '24
1) Annual Report for the year 23: Achieved operating income of 12.11 billion yuan, an increase of 6.44% over the previous year; realized net profit of 1,008 billion yuan, an increase of 43.65% over the previous year.
2) 2014 Quarterly Report: Achieved operating income of 3,061 billion yuan, up 6.31% year on year; realized net profit of 278 million yuan, up 31.97% year on year.
Four-wheelers: Revenue declined slightly due to macroeconomics. The market share in Europe ranked first. Affected by the global macroeconomic situation and local geopolitical factors, the company's four-wheeler business as a whole showed a trend of correction after the epidemic. The company's four-wheeler sales revenue reached 6.504 billion yuan, a slight decrease of 4.88% over the previous year. However, the company accelerated the pace of retail inventory removal, and adjusted the proportion of high-end products in the high-end market, and successively launched new products such as the Z950 Chill and four-seater versions, X6 OVERLAND, and the new X8 and X10. In total, the four-wheeler sales volume reached 146,500 units, and the average product price increased to 44,000 yuan (the average price last year was about 410,000 yuan/unit). The company's four-wheeler export value accounts for about 70.79% of the domestic export value of similar products. The leading position is stable. Distribution outlets in the US continue to expand, and the European market share continues to rank first in the market.
Two-wheelers: the product line continues to improve, and revenue is growing rapidly
The company's two-wheeler business achieved sales revenue of 4.479 billion yuan for the full year of '23, an increase of 32.85% over the previous year, and achieved sales volume of 197,000 vehicles. Of this, domestic sales revenue was 2.189 billion yuan. Sales volume was 99,300 units, and domestic sales increased 8.63% year on year; in terms of export sales, the company sold 98,700 units of two-wheelers throughout the year 23, achieving export revenue of 2,291 billion yuan, an increase of 78.22% year on year. The company continues to iterate on existing products, and continues to improve the product lineage with fist products such as 450SR, 450CLC, 800NK, 800MT, and XO Baboon. The sales volume of ≥250CC cross-riding motorcycles ranks at the leading level in the industry.
The company's profitability has continued to improve for 23 years. The company's gross margin reached 33.5% in '23, an increase of 8.31pct over the same period last year. Specifically, the company's gross margin for two-wheelers reached 24.64%, an increase of 4.12pct; the gross margin for four-wheelers reached 39.52%, an increase of 12.06 pcts year-on-year. We believe it is mainly due to the improved product structure brought about by the company's increase in the share of high-end products and the decline in shipping costs. The company's net interest rate for 23 years was 8.73%, up 2.23pct year-on-year. It is expected that in the future, as the proportion of the company's high-value products continues to increase, the company's profitability is expected to continue to increase.
The company has clear barriers, a stable position in overseas markets, and maintains a “highly recommended” investment rating. We expect the company's 24-26 revenue to be 14.427 billion yuan, 17.314 billion yuan, 20.437 billion yuan, and net profit to mother of 1,331 billion yuan, 1,677 billion yuan, corresponding to the current market capitalization PE of 16.1 times, 12.8 times, and 10.9 times, maintaining a “highly recommended” investment rating.
Risk warning: risk of exchange rate fluctuations, weak overseas demand, economic recession, etc.