Short-term pressure on the 23-year performance. I am optimistic that CTP/CTC Structural Parts Release Company will release an annual report for the year 23, achieving revenue of 2.905 billion yuan, -3.14%; net profit to mother of 142 million yuan, -30.70% year over year; net profit after deducting non-return to mother of 131 million yuan, or -33.38% year over year.
Considering the slowdown in demand growth in the downstream market and fierce competition, we lowered the company's battery structural parts shipping assumption. We expect the company's corresponding EPS to be 0.87/1.14/1.33 yuan in 24-26 years (1.22/1.60 yuan 24-25 years ago), respectively. Referring to comparable company Wind, the 24-year average PE is 15 times. Considering that the company supports downstream customers to develop battery body integration and continues to empower the company to grow, the company was given 19 times PE in 24 years, corresponding to a target price of 16.62 yuan (previous value 19.91 yuan), maintaining the “increase” rating.
Revenue in 23Q4 increased year-on-month, and the decline in gross margin led to a decline in revenue of 916 million yuan, +4.79%/+10.17%; net profit to mother of 0.37 million yuan, -41.45%/-28.49%; net profit after deducting non-return to mother of 0.39 million yuan, or -38.06%/-19.69% year-on-month. The gross profit margin was 14.55%/4.02% in Q4 in '23, a month-on-month change of -3.10/-2.21pct. The company's expense ratio level remained stable during Q4 in '23. Among them, the sales/management/R&D/finance expense ratios were 0.59%/4.35%/4.61%/0.53%, respectively, with a month-on-month change of +0.04/-0.06/-0.00/-0.07pct.
The decline in gross margin of the NEV business dragged down 23 years, and Guimu Net Profit Company is mainly engaged in the new energy business and consumer electronics business, and is committed to promoting the application of high-end industrial aluminum alloys in the field of consumer electronics and new energy. In '23, the company achieved revenue of 2,905 billion yuan, -3.14% year-on-year. Among them, auto parts, electronic consumer goods, and durable consumer goods achieved revenue of 19.33/5.43/210 million yuan, respectively, -5.98%/+6.64%/-18.75%; gross margins were 16.59%/15.37%/18.16%, respectively, -2.78/-2.51/-1.66pct year-on-year. The decline in the company's revenue and net profit to mother in '23 was mainly dragged down by the NEV business.
The battery structural parts shipping industry is leading. FARI CTP/CTC Integrated Solution's main products for NEV battery structural components include NEV battery lower cases, battery lower case accessories, module structural parts, battery cell cases, etc. In '23, the company delivered a total of about 543,700 battery cases to lithium battery manufacturers and automobile manufacturers around the world, and the shipment volume was among the highest in the industry. Battery pack integration is the general trend. The industry is progressing at an accelerated pace this year. On April 18, the first CIIC integrated intelligent chassis mass production line product based on CTC technology from the Ningde Era went offline. The company deeply supports downstream customers' battery integration solutions (CTP, CTC), and is expected to fully benefit from the incremental demand for structural components brought about by the penetration of this new technology solution.
Risk warning: NEV shipments fall short of expectations, unexpected loss of company orders, and increased competition in the industry.