On the evening of April 29, the company released its report for the first quarter of 2024, which achieved total revenue, net profit attributable to mother, net profit of 2,331 million, 120 million, and 118 million, respectively, with a year-on-year increase of +8.97%, +8.00%, and +11.24%, respectively. The revenue side and profit side achieved both growth; gross sales margin of 13.50%, -0.61 pct year on year; net sales margin of 5.57%, year-on-year +0.07pct.
24Q1 The ability to control fees was improved. In the first quarter of 2024, the company's sales expense ratio, management expense ratio, R&D expense ratio, and financial expense ratio were 2.07%, 2.23%, 2.88%, and 0.57%, respectively, -0.2pct, and -0.6pct, respectively. Among them, the change in financial expense ratio was mainly due to the impact of exchange earnings due to the appreciation of the US dollar; the cost rate for the period was 7.74%, -1.2pct year on year.
The traditional motorcycle engine business focuses on technological innovation. Currently, the company is continuously developing new products and exploring ways to increase product performance in the motor sector. For example, in the fields of four-cylinder power and single-cylinder power, it empowers the company to have more profit points in the traditional business sector, which is conducive to a further increase in product market share.
The low-altitude economy is at the right time, and aviation engines are taking advantage of multiple businesses. In terms of products, in the first quarter of 2024, the company brought the CA550TI and CA110I aviation piston engines to the “Low Altitude Economic Innovation and Development Alliance Founding Conference and Unmanned Helicopter System Industry Development Seminar”; among them, the CA550TI is a 145 hp national chemical electric jet engine. It uses exhaust gas turbocharging technology and has the characteristics of high power-to-weight ratio, high lift limit, and high reliability. The main application end is 700kg-1600kg class fixed-wing drones, unmanned helicopters, etc.; among them, the CA110I aero piston engine has It has the characteristics of high reliability, high convenience, high stability, and high power-to-weight ratio. Its horsepower falls within the 100-200 horsepower section of piston engines highlighted in the “General Aviation Equipment Innovative Application Implementation Plan (2024-2030)”. The main application ends are multi-rotor (hybrid oil and electricity), small fixed-wing drones, etc. Application scenarios include agriculture, forestry and plant protection, transportation of alpine materials, fire extinguishing, measurement, surveying, and inspection. In terms of customers, Zongshen Airlines has customers in various countries such as the United Kingdom, France, Germany, Italy, etc.; among them, Polish customers who have been cooperating for 5 years have some of their terminal customers that have flown for up to 1,500 hours.
Investment advice: The company's Tongji and motorcycle engine business is recovering steadily, and the gross margin is stable. As a leading domestic aviation piston engine company, it is expected to benefit from low-altitude economic development. It is expected to achieve profits of 647/7.38/828 million yuan in 24/25/26, respectively, corresponding to 23.0/20.2/18.0 XPE, which is highly recommended!
Risk warning: 1. The growth of the ventilation and motorcycle engine business fell short of expectations; 2. The expansion of the aviation development business fell short of expectations.