Incident: The company released its 2024 quarterly report. Revenue for the first quarter of 2024 was 1,860 million yuan, up 24.04% year on year; net profit to mother was 210 million yuan, up 21.85% year on year; net profit after deduction was 192 million yuan, up 18.55% year on year.
Gross margin has declined, and the company is actively optimizing expenses. The company's gross margin for the first quarter of 2024 was 20.75%, down 0.75 pct year on year and 2.34 pct month on month; net margin was 11.31%, down 0.36 pct year on year, down 1.47 pct month on month. The company actively optimized expenses. In the first quarter of 2024, the company's expense ratio was 8.84%, down 0.83 pct year on year. Among them, the sales expense ratio was 1.02%, the same year on year. The management expense ratio, financial expense ratio, and R&D expense ratio were 2.52%, -0.66%, and 5.96%, respectively, down 0.07 pct, 0.24 pct year on year.
Performance remained steady, and sales of major products grew rapidly. From January to January 2024, the company's main business revenue was 1,817 billion yuan, an increase of 25.53% over the previous year. Sales of the company's main products maintained rapid growth, with sales of 922,700 sets of intelligent electronic control products, up 28% year on year; sales of 6851 million sets of disc brakes, up 13% year on year; sales of 2.7849 million units of lightweight brake parts, up 52% year on year; sales volume of mechanical steering products was 739,300 units, up 54% year on year.
The market is developing smoothly, and there are plenty of new targeted projects. On the basis of stabilizing existing customers, the company increased its market development efforts. The total number of new targeted projects added in the first quarter of 2024 was 106. Among them, 22 new mass production projects were added for disc brakes, 46 new fixed-point projects; 11 new mass production projects were added for lightweight products, and 9 new fixed-point projects were added; 11 new mass production projects were added for electronic parking brake systems and 11 new fixed-point projects; 5 new fixed-point projects were added for electric power steering systems; and 2 new mass production projects were added for advanced driving assistance systems; 3 new fixed-point projects were added for mechanical steering columns; and 7 new fixed-point projects were added for mechanical steering columns. As the company continues to release on-hand orders, the company's performance is expected to maintain steady growth.
Profit forecasting and investment suggestions: As a domestic leader in the field of line control, the company has obvious technological leadership advantages. Currently, the company has plenty of new targeted projects, and the certainty of performance growth is high. The company's revenue for 2024-2026 is expected to be 96.21 billion yuan, 124.07 billion yuan, and 15.483 billion yuan, respectively, and net profit to mother will be 11.01, 15.04, and 1,883 billion yuan, respectively. The corresponding PE is 21.87, 16.02, and 12.80 times, respectively, maintaining the “buy” rating.
Risk warning: Automobile demand falls short of expectations, competition pattern worsens, raw material prices fluctuate, technology upgrades fall short of expectations, new project expansion progress falls short of expectations, and capacity construction progress falls short of expectations.