Non-net profit deducted in the first quarter increased 35% year-on-year, and the main business developed steadily. In 2024, the company's revenue in Q1 was 3.454 billion yuan, +4.84% YoY, -8.30% month-on-month, net profit of 156 million yuan, -4.86% YoY, -9.18% month-on-month, after deducting non-net profit of 168 million yuan, +35.44% YoY and +11.26% month-on-month. Overall, the company's performance is growing steadily. The main product is expected to be a stable volume of automotive low-voltage lead-acid batteries.
Expense control was stable, and gross margin increased year-on-month. The gross margin of 24Q1 Camel shares was 17.28%, +2.1pct year over year, +1.0pct month-on-month, profitability improved, 24Q1 sales/management/R&D/finance expenses ratio was 5.1%/3.0%/2.0%/0.6%, +0.4/+0.2/-0.5pct, respectively, and -0.5/+0.2/-0.1/+0.4pct month-on-month respectively. The company continues to pay attention to R&D, adhere to market and product-oriented R&D mechanisms, in technology breakthroughs, project docking, product development matrices, and patents Remarkable results have been achieved in innovation, etc., which have effectively improved production efficiency and further reduced production costs. Overall, the company's rate control is stable, with a net interest rate of 4.49%, -0.5pct year-on-year, and -0.1pct month-on-month.
The construction of terminal channels was accelerated, and low-voltage lithium batteries received 35 fixed points. The company completed the introduction and switching of 51 model projects in 23 years, including 60 new designated projects for BMW Brilliance 2025-2028 lead-acid AGM products; 18 new designated projects for new energy vehicles, including SAIC, BYD, Nana, Jingshen, Zero Sport, and Zhiji, completed mass production and introduction of 9 fixed-point projects, and achieved supply of models such as SAIC, Avita, Geely, and Supercar; the automotive low-voltage lithium battery business received 35 new project targets, including 12V and Geely lithium batteries FAW Jiefang, FAW Hongqi, Guangzhou Automobile, Many well-known car companies such as Dongfeng, JAC, and Cyrus are targeting various models; in terms of 24V lithium batteries, various car companies such as Foton Daimler, Beiqi Foton, Beiben Heavy Duty Truck, Great Wall, FAW Jiefang, and Geely have targeted sales of low-voltage lithium battery products +27.9% year-on-year.
Undervalued segmented track leaders, channel upgrades and business development open up room for growth. The future growth space of Camel Co., Ltd. mainly lies in: 1) channel upgrading (by the end of 2023, the company had completed the construction of more than 3,300 “Yunengda” service providers and more than 110,000 “Yunengda” terminals), and the scale of the lead-acid battery rear assembly market and overseas market is far larger than the domestic front assembly market; 2) business development. The company actively developed the lithium battery business and completed the construction of 12V/24V/48V BMS platform products; energy storage battery research and development continued, and completed the development of liquid-cooled container systems and iterative R&D of user energy storage BMS; Research and development standardization construction work for the entire lithium battery recycling process.
Risk warning: Raw material prices fluctuate, the international and economic environment changes, and demand in the automotive industry is under pressure.
Investment advice: Maintain profit forecasts and maintain a “buy” rating.
Optimistic about the stable volume of Camel's main business, channel upgrades and business development will open up room for growth, and maintain profit forecasts. It is estimated that in 2024/2025/2026, the net profit attributable to Camel shares will be 8.02/10.39/1,219 billion yuan respectively, corresponding EPS will be 0.68/0.89/1.04 yuan, and the corresponding PE will be 8 times 12/9/8 times, respectively, maintaining the “buy” rating.