24Q1 performance is under pressure, waiting for the share of high-profit products to increase
The company released its quarterly report for the year 24, and achieved revenue of 710 million yuan in 24Q1, +33.74%/-22.47%; net profit to mother of 17.0562 million yuan, or -30.64%/-53.85%; net profit without return to mother of 16.3814 million yuan, -23.13%/-57.49% YoY. We maintain the company's 24-26 EPS forecast of 0.87/1.14/1.33 yuan, respectively. Referring to comparable company Wind's 24-year average PE of 15.6 times, considering that the company and downstream customers cooperate closely on CTP/CTC technical solutions and have a first-mover advantage, the company was given 19 times PE in 24 years, corresponding to a target price of 16.62 yuan, maintaining the “gain” rating.
24Q1 Cost and cost increases drag down the company's net profit to mother
24Q1's gross margin was 12.07%, -2.48pct month-on-month; net margin was 2.39%, -1.63pct month-on-month.
In terms of cost ratio, 24Q1 company's sales/management/ R&D/ finance rate was 0.62%/5.01%/5.62%/0.78%, respectively, with a month-on-month change of +0.03/+0.66/+1.01/+0.25pct. Among them, the increase in R&D investment led to an increase in R&D expenses. In terms of cash flow, net cash flow from 24Q1 operating activities was $130 million, +56.16% year over year.
Deeply involved in the field of aluminum alloy processing for new energy vehicles and consumer electronics
The company is deeply involved in the field of deep processing and integration of aluminum alloy materials and materials, mainly for the fields of new energy vehicles and consumer electronics. In the new energy vehicle market, the company's customers include battery manufacturers and automakers. Its main products include battery trays, battery structural parts, module structures, and body parts. In the field of consumer electronics, the company's main products include metal parts for middle frames, back panels, and camera mounts for mobile phones, tablets, laptops, etc. 24Q1 Increased sales of automotive parts and consumer electronics products led to an increase in overall revenue.
Promote production capacity construction in Yibin, Sichuan to effectively meet customer needs
In order to better meet customer product delivery needs, the company lays out production capacity in Yibin, Sichuan, and can spread to the southwest region. On March 29, the company announced that Guangdong Hesheng New Energy, a wholly-owned subsidiary, established Sichuan Hesheng New Energy Auto Parts Co., Ltd. with 50 million yuan of its own capital, which is conducive to integrating upstream and downstream supply chain resources, reducing procurement costs, and strengthening the company's competitiveness. On April 18, it was announced that Guangdong Hesheng New Energy and the Yibin Sanjiang New Area Management Committee signed an “Investment Agreement” to invest 1.5 billion yuan to build the Yibin Hesheng NEV high-end components project, with fixed assets of about 700 million yuan to be built in three phases. The first phase and phase two projects plan to build high-end automotive parts production lines.
Risk warning: NEV shipments fall short of expectations, unexpected loss of company orders, and increased competition in the industry.