Introduction to this report:
The company is deeply involved in the precision parts industry, accumulating strong technology to expand the NEV component business, and developing a second growth curve. It has obvious technological and product advantages, and is expected to rapidly increase its market share.
Key points of investment:
Investment advice: The company's expansion of the NEV component business opens a second growth curve, which is expected to lead to a high increase in performance. The 2024-2025 EPS was maintained at 0.63 and 0.94 yuan, and the 2026 EPS was added at 1.11 yuan. Referring to the comparable company's 2024 PE valuation, the company was given 26.28 times the 2024 industry average PE, the target price was lowered to 16.56 yuan, and the holding increase rating was maintained.
The performance was in line with expectations. The company announced that in 2023, it achieved revenue of 3,024 billion yuan/ +13.6%, and net profit of 77 million yuan/ +209.54% to mother. In the fourth quarter, we achieved revenue of 787 million yuan/YoY +14.31% /-2.18% month-on-month, and net profit to mother of 34 million yuan/year-on-year positive /-7.16% month-on-month.
The profitability of the main business has increased, and demand for orders is strong. Achieved gross profit margin of 14.68% /+0.48pct and net profit margin of 2.54% /+1.6pct in 2023. In 2023, automotive components achieved revenue of 748 million yuan/ +24.2%; the communications sector achieved revenue of 241 million yuan/ +48.1%. The company's performance growth is mainly due to: 1) strong demand for the company's power batteries and electronic control components; 2) breakthroughs in the new energy vehicle trielectric and energy storage markets; 3) breakthroughs in new industrial intelligent manufacturing technology reform technology to reduce costs and increase efficiency; 4) domestic and foreign customers work together on platforms to provide rapid response local support services to international customers and enhance global competitiveness.
Breakthroughs have been made in new businesses to help expand market space. With its R&D technology accumulation in the fields of ultra-precision metal and plastic molding, polymer engineering materials, etc., the company has entered the NEV component business. Products such as power battery busbar/structural parts, drive motor connectors, electronic control system inverters/sensor components, lightweight automobile parts, and solid oxide fuel cell heat exchangers have been widely recognized by overseas core customers, and have been targeted by new customer projects from first-tier car companies and well-known enterprises.
Risk warning: The penetration rate of new energy vehicles falls short of expectations, and product expansion falls short of expectations.