Introduction to this report:
The company's revenue performance was strong, export sales combined with product structure upgrades, and the quarterly report exceeded expectations. The company's new vehicle cycle continues to be fulfilled, and profitability is continuously optimized.
Key points of investment:
The target price was raised to 191.82 yuan, maintaining an increase in holdings rating. Maintain the company's 2024-2025 EPS forecast at 8.34/10.47 yuan, and add the 2026 EPS forecast of 12.73 yuan. Considering the company's product upgrades and product years, performance release was accelerated, and the target price was raised to 191.82 yuan (originally 150.12 yuan), corresponding to 23 times PE in 2024.
The company's annual report was in line with expectations, and disturbances from external factors gradually came to an end. The company's revenue in 2023 was 12.11 billion yuan, up 6.4%; net profit to mother was 1.01 billion yuan, up 43.7%, in line with the median of the previous performance forecast range; 4Q23 revenue was 2.72 billion yuan, down 0.9%; net profit to mother was 210 million yuan, up 57%. Disturbing factors such as exchange and freight were gradually eliminated, and performance was better than revenue.
Export performance was strong, and the quarterly report exceeded expectations. The company's 1Q24 revenue was 3.06 billion yuan, an increase of 6.3%, and net profit to mother was 280 million yuan, an increase of 32%. The company's export performance in the two rounds was strong. The fourth round remained stable under a high base. Overseas demand drove export revenue growth, and the revenue side of the first quarter report achieved steady growth, exceeding market expectations.
Product structure upgrades have been implemented, and profitability has been continuously improved. The company's comprehensive gross profit margin in 2023 was 33.5%, up 8.1 pct, net profit margin 8.7%, and 2.2 pct. The displacement upgrade optimizes the product structure, and profitability continues to increase. In 2023, the gross profit margin for four-wheelers was 39.5%, an increase of 12.1 pct, and the gross profit margin for two-wheelers was 24.6%, an increase of 4.2 pcts. The company's 1Q24 gross profit margin was 32.5%, a decrease of 1.7 pct, mainly due to the structural impact of the increase in the share of two-wheelers in revenue. The profitability of four-wheelers and two-wheelers continued to improve in the first quarter. The net interest rate for 1Q24 was 9.5%, an increase of 2.0pct. The cost ratio continued to improve after channel pressure was released.
Risk warning: New car sales fall short of expectations, and raw material prices have risen.