Incidents. In 2023, the company achieved revenue of 3.91 billion yuan, +16.6% year on year, net profit of 497 million yuan, gross profit margin of 23.2%, net profit margin of 12.7%; 2024q1 achieved revenue of 780 million yuan, -5.5% year on year, net profit of 120 million yuan, +7.8% year on year, gross profit margin of 23.2%, and net profit margin of 14.7%.
Tesla's ideal sales volume was high, and growth was steady in 2023. The company's strength has been endorsed by SAIC Motor and has successively expanded new energy customers such as Tesla and Ideal. Since 2022, the company's new energy customer revenue has contributed nearly 60%. In 2023, the core customer Tesla and Ideal sales increased 38%/182% year on year, driving the company's total revenue to increase 16.6% year over year. 2024Q1, core customer performance was slightly lower than expected, and revenue decreased by 5.5% year over year. Looking ahead to the second half of the year, the introduction of the “trade-in” policy is expected to boost sales in the automotive industry. After the Beijing Auto Show, relevant customers will implement new cars, facelift, and pricing, which is expected to drive an increase in revenue scale.
Price fluctuations and capacity crawl disrupted 2023, and 2024Q1 profits improved markedly. In 2023, due to fluctuations in terminal product prices and the increase in depreciation and amortization of related assets after the commissioning of some fund-raising projects, the company's gross margin was 23.2%, 24.5% compared to 2022, a year-on-year decrease of 1.3 pct. As cost control increased, the net profit margin was 12.7% (13.3% in 2022), and the fluctuation was less than the gross profit margin. 2024Q1, the impact of early project crawling gradually decreased. The company insisted on R&D innovation, production technology process transformation and upgrading, and improved production efficiency led to profit improvement. The gross margin/net margin improved by 2.6 pct/5 pct month-on-month (2023Q4 gross margin/net margin was 20.6%/9.4%, respectively).
The volume and price of the stamping business have risen sharply, and integrated die casting is progressing significantly. New-power car companies have little experience in car construction. Some choose the OEM model and develop contracts to assembly, and the industry pattern is concentrated. The company has a total of more than 3,000 types of stamping parts. The products have been approved by joint ventures, developed and produced in-house, and have assembly support capabilities. It has received assembly orders from Ideal and NIO one after another, and the bicycle ASP continues to improve. The company began introducing large-tonnage equipment in 2020, with a forward-looking integrated die-casting layout. The Yancheng Doli 6100 ton project has achieved mass production and sales, and the rest of the production lines are being installed. 2023Q3, the company won integrated die-casting orders from leading car companies, and is expected to contribute more than 2 billion yuan in revenue during the life cycle. In addition, the company plans to invest 3 billion yuan to build new production capacity in Jintan, Jiangsu, and is expected to contribute 1.7 billion yuan in post-delivery revenue.
Profit forecast and valuation: It is estimated that in 2024-2026, the company's revenue will be 47/556.6 billion yuan, and net profit to mother will be 6.2/7/83 billion yuan, respectively. The corresponding PE is 12/10/9 times, respectively, maintaining a “buy” rating.
Risk warning: raw material price fluctuations; new customer expansion falling short of expectations; risks related to industry space estimation, etc.