The company's performance in 2023 was high, and the 2024Q1 profit slightly exceeded expectations; the company achieved revenue of 24.558 billion yuan, +15.04% year over year; net profit to mother was 2,921 billion yuan, +13.51% year over year; gross sales margin was 27.89%, +1.82PCT year on year; and net sales margin was 11.95%, -0.27PCT year on year. In Q1 2024, we achieved revenue of 6.44 billion yuan, +13.4% year on year; net profit to mother was 648 million yuan, +7.73% year on year; gross sales margin was 27.05%, +1.48 PCT year on year, -2.19 PCT month on month; net sales margin was 10.03%, -0.69 PCT year on year and -3.15 PCT month on month. Revenue from the company's auto zero business fell short of expectations, mainly due to downstream customer sales falling short of expectations. Increased scale effects, depreciation of RMB, and falling shipping costs led to an increase in the company's gross margin.
Auto zero business: The growth rate is slowing down due to downstream customers, and the robot business has broad revenue prospects: the automotive sector is expected to be 10.5 billion yuan in 2023, actual 9.9 billion yuan, +32% year over year; revenue growth was lower than expected mainly due to lower downstream sales and accounting policy changes. The gross profit margin of the auto zero business was 27.43%, +1.5pct year over year. The main reasons for the increase in gross margin were increased scale effects, depreciation of RMB, and lower shipping costs. Looking ahead to 2024, benefiting from the number of leading domestic NEV customers, we expect the company's auto parts business to grow by 30%. The company's robotics business is progressing as scheduled. We believe that with its excellent R&D and management capabilities, the company can be targeted by major customers.
Refrigeration business: maintaining steady growth and steady increase in gross margin
The refrigeration sector is expected to be $15 billion in 2023, compared to $14.6 billion, +6% year-on-year, slightly lower than expected, mainly affected by changes in accounting policies. The gross profit margin of the refrigeration business was 28.2%, +2.04pct year over year. Looking ahead to 24, domestic household appliance consumption continues to pick up+consumer goods trade-in policy, compounded by the 24-year year-on-year recovery overseas, we expect the company's traditional refrigeration revenue to grow 0-10% year-on-year in '24.
Investment advice
The company has a leading global position in the field of thermal management for new energy vehicles. The robotics business has broad prospects and is expected to become the company's second growth curve. We expect net profit to be 35.04/42.21/5,040 billion yuan respectively on 24/25/26, corresponding to PE 24/20/17 times, respectively, maintaining the company's “buy” rating.
Risk warning
Auto parts business growth fell short of expectations, industry competition intensified, shipping costs fluctuated greatly, raw material prices fluctuated greatly, and geopolitical risks.