Event: The company released its report for the first quarter of 2024. In the first quarter of 2024, the company achieved operating income of 2,075 billion yuan, up 15.79% year on year, down 5.77% month on month; realized net profit to mother of 221 million yuan, up 29.37% year on year, and a slight decrease of 2.64% month on month. The company's overall results for the first quarter of 2024 were in line with our expectations.
2024Q1 results were in line with expectations, and net interest rates to mother increased month-on-month. On the revenue side, the company achieved revenue of 2,075 billion yuan in 2024Q1, a slight decrease of 5.77% over the previous month. Judging from the main downstream 2024Q1 performance: domestic wholesale sales of new energy passenger vehicles in the narrow sense of the word were 1.945,600 units, down 34.18% from month to month, including 977,700 A0 grade and above pure electric passenger cars, down 38.69% month on month, 764,300 plug-in hybrid passenger cars, down 20.69% month on month; domestic heavy truck wholesale sales volume was 272,700 units, up 33.41% month on month. In terms of gross margin, the company's comprehensive gross margin for 2024Q1 was 22.65%, up 1.88 percentage points year on year, down 1.93 percentage points from month to month, and overall stable. In terms of period expenses, the company's expense ratio for the 2024Q1 period was 9.91%, down 0.60 percentage points year on year and 2.19 percentage points month on month. Overall cost control was effective. In terms of net profit to mother, the company achieved net profit of 221 million yuan in 2024Q1, a slight decrease of 2.64% from the previous month, corresponding to a net profit margin of 10.67%, an increase of 0.36 percentage points over the previous month.
The leading electric drive gear is always strong, and robot reducer+Minsheng gear opens up room for long-term growth.
As the electrification rate of passenger cars continues to rise, the automotive gear market pattern is being reshaped, and the trend of gear outsourcing is becoming more and more obvious. As a leader in electric drive gears, Shuanghuan has obvious competitive advantages in technology research and development, equipment production capacity, and customer resources, and will continue to benefit from the increase in the electrification rate of the industry in the future.
In terms of speed reducers, speed reducers are the core components of industrial robots, and account for a large share of value. Shuanghuan has been deeply involved in precision speed reducers for industrial robots for many years, has gradually achieved full coverage of precision reducers required for 6-1000KG industrial robots, and has also provided domestic first-line robot customers. Revenue from the deceleration business will continue to grow in the future. In terms of Minsheng Gear, the company established Environmental Drive Technology to deploy Minsheng Gear and acquired Sanduole to help develop the Minsheng Gear business. Sanduole's main products include precision gears, plastic gear speed reducers, auto parts and functional assemblies, and cover a wide range of downstream high-quality customers.
Profit forecast and investment rating: We maintain the company's 2024-2026 net profit forecast of 1,003 billion yuan, 1,253 billion yuan, and 1,528 billion yuan. The corresponding EPS is 1.18 yuan, 1.47 yuan, and 1.79 yuan, respectively. The price-earnings ratios for 2024-2026 are 21.02 times, 16.83 times, and 13.80 times, respectively, maintaining the “buy” rating.
Risk warning: New energy passenger car sales fall short of expectations; impact of raw material price fluctuations; new business development falls short of expectations; merger and acquisition integration falls short of expectations.