24Q1 revenue was basically the same year over year
Huayu Auto released its quarterly report. In Q1 of '24, it achieved revenue of 37.02 billion yuan (yoy +0.56%, qoq -21.29%), net profit to mother of 1,263 billion yuan (yoy -11.93%, qoq -48.95%), and deducted non-net profit of 1,085 billion yuan (yoy -7.87%, qoq -54.04%). We expect the company's net profit to be 77.8/86.9/9.83 billion yuan for 24-26, respectively. Comparatively, the company's 24-year Wind unanimously expected an average PE value of 13.0 times. Considering that the company's traditional business accounts for a relatively high share, the company was given 11 times PE in 24 years, with a target price of 27.17 yuan (previous value 24.45 yuan) to maintain a “purchase”.
Net interest rate for interior and exterior parts declined year on year. The steady performance of the functional parts business was divided by business: 1) Interior and exterior parts achieved revenue of 28.11 billion yuan, an increase of 2.6% year on year, and net profit of 730 million yuan, -15.5% year over year, or gross margin declined due to a year-on-year decrease in investment income from joint ventures and competition among car companies. 2) Functional parts revenue +3.8% YoY to 6.24 billion yuan, net profit +1.2% YoY to 530 million yuan; 3) Metal forming and molding/electronic/electrical components/heat processing business revenue was -17.4%/-23.8%/+3.7% YoY to 21.0/13.5/140 million yuan, respectively, with net profit of -50.7%/-3.5%/+72.0% YoY respectively.
Q1 gross margin is under pressure, and the rising production capacity of new projects is expected to gradually improve profits. 24Q1 The company's gross margin was 12.54%, -2.01 pct month-on-month, -1.34 pct year on year; net margin was 3.87%, -1.91pct month-on-month, and -0.71 pct yoy. The company's gross margin declined month-on-month, possibly due to price competition among domestic automakers, and the fact that the commissioning of new projects has yet to achieve economies of scale. In terms of expenses, the company's cost control measures continued to advance. The 24Q1 sales, management and R&D expenses rates were 0.66%/4.80%/4.44%, respectively, -0.04/-0.32/-0.48pct; financial rates were +0.44/+0.38pct to 0.44%, respectively. In the future, as the production capacity of the company's new projects climbs and is completed, internal operating efficiency is further optimized, and profitability is expected to gradually improve.
Focus on intelligence to promote technological innovation and transformation of advantageous businesses
The company focuses on “digital transformation” and “intelligent upgrading”. In 23, the company accelerated technological innovation and transformation of advantageous businesses. The cockpit sector relied on platform-based capabilities to provide systematic smart cabin solutions. The electrification aspect has covered a full range of 400V-800V drive motors/electronic control products; digital full-color interactive floor lamp products in the field of intelligent vision have achieved supporting mass production and significant cost reduction. Furthermore, at a time when domestic car companies are going overseas, the company is also speeding up the formation of a global support layout. In the future, it is expected to rely on the industrialization of new technologies and products to continue to achieve breakthroughs in revenue volume and structural optimization.
Risk warning: Downstream customers' vehicle production and sales fall short of expectations, and the profitability of new products falls short of expectations in the short term.