Matters:
The company disclosed production and sales data for April 2024. In April, the company sold 210,000 units (+15.5% year over year), of which the company sold 51,682 new energy units (+129.7% year over year). In January-April, the company achieved sales volume of 902,000 units (+14.2% YoY), including sales of 560,000 units of autonomous passenger vehicles (+10.3% YoY), cumulative sales of 180,000 units of autonomous new energy (+68.6% YoY), and overseas sales of its own brands (+82.8% YoY).
Ping An's point of view:
Both autonomous new energy and overseas achieved high year-on-year growth in April. According to the company's announcement data, the overseas sales volume of the company's own brands reached 31649 units in April 2024, an increase of 93.2% over the previous year. In terms of new energy vehicles, the company sold 51,682 new energy units under its own brand in April, up 129.7% year on year. Among them, Changan Qiyuan delivered 11833 units in April, Deep Blue delivered 12,744 units in April, and Avita delivered 5,247 units in April. According to the company's plan, in the second quarter of '24 and the second half of the year, the company will launch a variety of new energy models. The Deep Blue G318 will be pre-ordered in late May, and the Deep Blue S7 and SL03 models equipped with Huawei smart driving solutions will also be launched; Changan Qiyuan E07 appeared at the Beijing Auto Show and is expected to be launched in the second half of the year.
Cooperation with Huawei is progressing smoothly, and the new company has great potential for business scale. In November 23, the company signed an “Memorandum of Investment Cooperation” with Huawei. The company plans to invest in a company newly established by Huawei to develop, design, production, sales and service of automotive intelligent systems and component solutions. Currently, the company was incorporated in January 24, under the name Shenzhen Yinwang Intelligent Technology Co., Ltd. According to the company's recent announcement, the company's shareholding work is being actively promoted, and has now basically completed the financial, legal, business and technical due diligence investigations involved. According to the latest project progress, the company is expected to be no later than August 31, 2024 Sign the final transaction documents. We believe that the newly established company (Hope) has great business potential. According to estimates in our research report “Huawei and Changan join forces to create a “Bosch” in the smart car era” released on November 26, 23, Pioneer hopes it has the potential to grow into a leading supplier of integrated software and hardware solutions for smart cars in China, with a revenue scale of 100 billion yuan and a net profit potential of 10 billion yuan.
Profit forecast and investment advice: We maintain the company's net profit forecast for 2024-2026 at 4.48 billion/ 6.34 billion/ 7.95 billion yuan. The company is a leader in the transformation of new energy between state-owned car companies. Furthermore, the company actively embraces Huawei, Avita, and Deep Blue's solutions, and its competitiveness continues to improve. At the same time, the company is also currently clearly participating in Huawei's newly established intelligent solutions company, so we maintain the company's “Highly Recommended” rating.
Risk warning: 1) The sales volume of new energy models such as Changan Qiyuan, Deep Blue, and Avita may fall short of expectations, which will put a lot of pressure on the company's valuation; 2) The company's traditional fuel vehicle business faces downward pressure, putting pressure on the company's own-brand business profits; 3) The cooperation project between the company and Huawei has not yet been formally signed and put into effect, and there is still uncertainty about the details and progress of implementation.