Core views:
GM's business bucked the trend in '23, and NEVs are already profitable. The company released its 23rd annual report and its quarterly report for '24. In '23, the company achieved revenue of 30.42 billion yuan, +32% year-on-year, and net profit to mother of 4.742 billion yuan, +9.77% year-on-year. Among them, general automation revenue was 15 billion yuan, up 24% year on year, and servo/inverters/PLC & HMI/industrial robots increased 21%/10%/42.6%/21.9% year on year respectively, all achieving contrarian growth in weak markets. The market share of servos, inverters, and small PLCs increased by 6 pct/2 pct/3 pct year on year; robot share also increased.
Revenue from new energy vehicles was 9.4 billion yuan, with a year-on-year growth rate of over 80%. The business has achieved profits, and the risk of impairment has basically come to an end.
The Q1 performance exceeded the forecast center, and the automobile business revenue exceeded expectations. According to the company's quarterly report for '24, 24Q1 achieved revenue of 6.45 billion yuan, +36% year-on-year, net profit of 810 million yuan, +9% year-on-year, net profit of 790 million yuan after deducting net profit from non-mother, or +27% year-on-year, exceeding the previous forecast center. Among them, general automation/new energy vehicles/elevators/rail transit earned 32/23/9/34 billion yuan respectively, up 10%/150%/2%/32% year-on-year, and automobile revenue exceeded expectations. Q1 There was a month-on-month increase in marketing and research expenses, mainly due to increased investment in overseas going+digital strategies. Overall, the net interest rate to mother is still relatively stable, down 1.3 pcts from month to month.
The high increase in overseas travel has led to long-term expansion of space and profit centers, and the 24-year target is to maintain steady growth.
According to the company's annual report, it achieved overseas revenue of 1.7 billion yuan in 23, nearly doubling the year-on-year growth rate.
Overseas gross margin exceeded 40%, and there was a slight increase of 0.34pct over the previous year. Accelerated overseas travel brought room for growth and expansion of profit centers. The company's 2024 business target was to achieve a 15% to 35% year-on-year increase in revenue and a 5% to 20% year-on-year increase in net profit to mother, maintaining a relatively positive growth target.
Profit forecasting and investment advice. We expect the company to achieve net profit of 56.06/69.49/8.298 billion yuan in 24-26, giving the company 35xPE in 2024, corresponding to a reasonable value of 73.30 yuan/share, maintaining a “buy” rating.
Risk warning. Macroeconomic fluctuations, integration of mergers and acquisitions fell short of expectations, and competition intensified.