Event: The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved operating income of 5.861 billion yuan, an increase of 13.90% over the previous year, and achieved net profit of 654 million yuan, an increase of 14.77% over the previous year. Among them, the 2023Q4 company achieved revenue of 1,453 billion yuan in a single quarter, a slight decrease of 3.34% year on year and a slight decrease of 4.97% month on month; realized net profit of 115 million yuan, up 37.32% year on year and 42.50% month on month. 2024Q1 achieved operating income of 1,589 million yuan, up 15.83% year on year, up 9.36% month on month, and realized net profit of 195 million yuan, up 26.85% year on year and 69.57% month on month. The company's 2023Q4 performance was slightly lower than our expectations, and the 2024Q1 performance was in line with our expectations.
2023Q4 performance was hampered by multiple factors, and 2024Q1's performance was in line with expectations. On the revenue side, the company's 2023Q4 revenue was 1.453 billion yuan, down 4.97% from the previous month. It is expected to be mainly affected by overseas Christmas vacations and some strikes in North America; 2024Q1 revenue was 1,589 billion yuan, up 9.36% from the previous month. In terms of gross margin, the company's 2023Q4 comprehensive gross margin was 25.13%, down 3.04 percentage points from the previous month. It is expected to be mainly due to factors such as a decline in the scale of revenue, a decline in the exchange rate of the US dollar against RMB, and a rise in profits in the early stages of mass production of the new business; the 2024Q1 company's comprehensive gross margin was 27.85%, up 2.72 percentage points from month to month, returning to normal levels. In terms of expenses, the company's expense ratio for the 2023Q4 period was 11.29%, down 1.27 percentage points from month to month; the cost rate during 2024Q1 was 12.55%, up 1.26 percentage points from month to month. In terms of impairment, the company had asset impairment losses of 47 million yuan in 2023Q4, which affected current results to a certain extent. In terms of net profit, the company achieved net profit to mother of 115 million yuan in 2023Q4, a decrease of 42.50%, corresponding to a net profit margin of 7.90%, a decrease of 5.20 percentage points from the previous month; 2024Q1 achieved net profit to mother of 195 million yuan, an increase of 69.57% over the previous month, and a corresponding net profit margin of 12.28%, an increase of 4.38 percentage points over the previous month.
Expand product categories along core processes to open up the company's long-term growth space. The company's sun visor business has developed into a global leader, with a global market share of over 40% in 2022. On the basis of the sun visor business, the company further developed the headrest and ceiling business. Currently, the company's main customer in the headrest business is GM. It is expected that the supporting ratio for Chrysler and Ford will be further increased in the future, and the headrest business revenue scale is expected to continue to increase. The value of roof products is higher, the market space is larger, and they are the same roof system components as sun visors, and are also compatible with the core process.
The company is actively expanding its roof business. Currently, the company's roof products have successfully entered the supply system for customers such as new car builders in North America. As the subsequent roof business continues to gain fixed targets, it will contribute to the company's revenue growth, and ceiling products are expected to become an important direction for the company's future growth.
Profit forecast and investment rating: Considering the mass production progress of the company's new projects and the sales volume of downstream supporting customers, we adjusted the company's 2024-2025 net profit forecast to be RMB 865 million and RMB 1,038 million (previous values were RMB 944 million and RMB 1,127 million), adding the company's net profit forecast value of RMB 1,269 million for 2026, corresponding to EPS of RMB 0.68, RMB 0.82 and 1.00 yuan respectively. The price-earnings ratios were 18.78 times and 15.65 times respectively , 12.80 times. As a global leader in sun visors, the company accelerated the expansion of the roof business, and therefore maintained a “buy” rating.
Risk warning: The global passenger car industry's sales volume fell short of expectations; the company's new product expansion fell short of expectations.