Incident: The company released its 2024 quarterly report. In the first quarter, it achieved operating income of about 1,827 billion yuan, a year-on-year decrease of 2.57 percent, and realized net profit of 159 million yuan, an increase of 16.36% over the previous year, after deducting 110 million yuan in non-net profit, a decrease of 16.50% year-on-year. Net cash flow from operating activities was 109 million yuan, an increase of 829.56% over the previous year, mainly due to a decrease in cash for purchasing goods and receiving labor payments.
The company's core titanium product production and sales capacity has been enhanced, and the profit margin level is relatively stable. The company's revenue mainly consists of titanium products. 24Q1 titanium product production increased 5.64% over the previous year, and sales volume increased 5.62% over the previous year.
The gross sales margin for the same period was 17.65%, and the company's gross sales margin may have decreased slightly by 0.89pct year-on-year due to changes in the sales structure of short-term delivery products. The company's net sales margin was 9.28%, a slight increase of 0.57pct over the previous year.
The company's assets are growing steadily, and overseas markets have broad prospects. The company's 24Q1 current assets increased by 278 million yuan, illiquid assets increased by 387 million yuan, and overall assets showed an upward trend. According to the company's official website, Baotai Co., Ltd. held a cooperation signing ceremony to combine its production capacity advantages with each other's titanium market advantages to meet market challenges. At the same time, the company won the French Safran Group Cooperation Award, Qualified Supplier and Delivery Performance Award, further enhancing its overseas market image. Combined with the company's impressive overseas sales growth of 77.74% in 2023, thanks to the recovery of the export aviation market and new demand in the 3C field, the overseas share is expected to expand further.
The company's R&D investment is growing steadily, and cost control is stable. The company's 24Q1 R&D expenses were 37 million yuan, an increase of 3.82% over the previous year. Sales expenses were 21 million yuan, management expenses were 51 million yuan, and financial expenses were 08 billion yuan. The cost ratio for the period was 6.40%, a year-on-year decrease of 0.22 pct. Expense control was relatively stable.
Profit forecast: We expect the company's 24-26 revenue to be 78.28/88.66/9.353 billion yuan, and net profit to mother of 688/8.22/917 million yuan. The company has a good market base in the field of titanium alloys. Military and civilian two-wheel drive, combined with the resonance of overseas market demand, will hopefully drive increased profitability. We have given an “increase in weight” rating.
Risk warning: Overseas business expansion falls short of expectations, military price reduction risk, raw material price risk.