The company discloses its 2024 quarterly report:

24Q1: Revenue of 2.6 billion (+7.3%), net income of 210 million (+29%), deduction of not 2.0 (+14%).

Revenue: Gas-Zero maintained a high increase

We expect 24Q1 zero steam heat management business revenue to maintain a high increase of +60-70% year-on-year, refrigeration accessories to achieve single-digit growth, and a slight decline in refrigeration equipment.

① The core growth business thermal management business has plenty of orders in hand to maintain smooth transformation. ② The cold distribution business is expected to benefit from high growth in the Q1 production side of downstream air conditioning, with good sales performance; however, considering the downward pressure on the downstream year, the revenue growth rate is expected to be lower than the sales growth rate. ③ The refrigeration equipment business is expected to decline slightly in Q1, considering that there is some pressure downstream from public construction and real estate.

Profit: The net interest rate still maintained a good performance

24Q1 The company's gross profit margin was 17.5% (-2.0pct), net profit margin 7.9% (+1.3pct), net profit margin 7.6% (+0.4pct).

Q1 The gross margin is under slight pressure. We expect the main reason is ① the cold mixing business is under annual downward pressure from downstream customers; ② structurally, the share of the refrigeration equipment business, which has a relatively high gross margin, will decline slightly. In the future, we need to pay attention to the company's exploration of potential efficiency and digestion of the annual pressure reduction in cold matching, as well as the increase in gross margin due to improvements in the customer structure.

The Q1 net interest rate maintained a steady increase. On the one hand, the net interest rate was lowered due to the non-recurrent impact of the 23Q1 base period, which lowered the net interest rate; on the other hand, the company better digested the gross margin pressure on the cost side: 24Q1 sales, management, R&D, and financial expense ratios of +0.1, +0.3, -0.4, and -0.7 pct, respectively.

Investment advice: buy ratings

We continue to be optimistic about the growth of the company's thermal management business. At the same time, the main cold distribution business is also expected to continue to optimize the structure and improve profits.

After adjusting the profit forecast, net profit due to mother is estimated at 9.2 billion yuan, 10.9 billion yuan, and 1.31 billion yuan for 24-26 (the value was 8.9 billion yuan and 1.05 billion yuan before 24 and 25 years ago), corresponding to PE14, 12, and 10X. Maintain a buy rating.

Risk warning: competition intensifies, downstream downward pressure increases, auto zero business expansion falls short of expectations