The 2024 quarterly report performed well, maintaining the “buy” rating in Q1 of 2024. New energy revenue increased 103% year over year, and profits achieved high growth. The company continues to break through in overseas markets, and the new energy business is expected to drive future growth. Considering the volume of the new energy business, we raised the 2024-2025 profit forecast and added 2026 profit forecasts. We expect net profit to be 5.12, 6.90, and 922 million yuan (originally 4.52 and 628 million yuan), EPS is 1.13, 1.53, 2.04 yuan (originally 1.00, 1.39 yuan), and the current stock price corresponding to PE is 21.9, 16.3, and 12.2 times, maintaining the “buy” rating.
Excellent performance in the first quarter report, high growth in the new energy business
(1) In 2024, the company achieved revenue of 863 million yuan in Q1, an increase of 22.22% over the previous year. Among them, the digital energy business achieved revenue of 160 million yuan, an increase of 103.33% over the previous year, and the new energy revenue continued to grow at a high rate; the digital maintenance business achieved revenue of 688 million yuan, an increase of 11.61% over the previous year. (2) Gross margin fell 1.67 percentage points to 56.72%, which is expected to be mainly due to changes in the company's revenue structure. (3) Sales, management, and R&D expenses were -2.50, +0.43, and -1.20 percentage points year-on-year, respectively, and expenses were reasonably and effectively controlled during the company period. (4) Net profit attributable to mother was 125 million yuan, up 73.34% year on year, net profit after deducting non-return to mother was 125 million yuan, up 70.65% year on year. The high increase in profit was mainly due to the optimization of the company's expense ratio.
Continued breakthroughs in overseas markets, and the new energy business drives growth
The company's new energy business continues to break through in products, customers and production capacity. (1) On the product side, the company released three important products: DC HiPower for high-power supercharging piles, DC Compact for small DC piles, and ACUltra for commercial AC piles, with leading performance. In the future, megawatt-scale charging piles (MCS), bidirectional charging/discharging piles (V2X), and full-scenario overall solutions supporting integrated optical storage, charging and intelligent energy management will be launched, ultimately realizing the integration of the three networks of charging networks, vehicle networks, and power grids. (2) Client. In 2023, the company successfully signed a number of the world's top 50 large enterprise customers. The North American market showed exponential growth in strategic customer reserves, the European market also signed a number of major regional customers, and established strategic partnerships with many internationally renowned energy companies. (3) On the production capacity side, the company's global production capacity layout creates a supply advantage. In 2023, while ensuring the production capacity of AC charging piles, the company's Vietnamese production base added production capacity for DC charging piles; the North American plant was officially completed and put into operation by the end of the year, providing a production capacity guarantee for future business development. The new energy business is expected to drive the company's continued growth, and the future can be expected.
Risk warning: Sales of new automotive diagnostic products are slowing down; sales of new energy products fall short of expectations.