Core views

The company released its 2024 quarterly report, and achieved revenue of 825 million yuan in 24Q1, a significant increase of 46.14% over the previous year. The growth rate of export order revenue clearly exceeded expectations. Q1 achieved a gross profit margin of 17.43%, a year-on-year decrease of 0.67pct. The estimated gross margin fluctuation is mainly related to short-term adjustments in the company's business structure. Achieved a net profit margin of 10.34%, an increase of 2.87pct over the previous year. In 24Q1, net profit attributable to the parent company was 85 million yuan, an increase of 102.33% over the previous year. Thanks to the continued growth of the company's export OEM business, the company's revenue and profit performance in the first quarter of the year exceeded previous market expectations.

occurrences

The company released its 2024 quarterly report.

24Q1 achieved operating income of 825 million yuan, an increase of 46.14% year on year, net profit attributable to shareholders of the parent company of 85 million yuan, an increase of 102.33% year on year, and net profit attributable to mother after deducting non-recurring profit and loss of 81 million yuan, an increase of 101.13% year on year.

From a profit perspective, the company achieved a gross profit margin of 17.43% in 24Q1, a year-on-year decrease of 0.67pct, a net profit margin of 10.34%, and an increase of 2.87pct year-on-year.

Brief review

1. Revenue level: Export order business continues to grow at a high rate

The company's 24Q1 revenue was 825 million yuan, up 46.14% year over year. Let's break it down:

1) The traditional foundry business is expected to contribute most of the growth, and the foundry business is expected to grow by close to 50%; 2) The auto parts business is expected to increase slightly year-on-year due to short-term seasonal factors, and the subsequent peak season of Q2-Q3 is expected to increase significantly.

II. Profitability

From a gross margin perspective, the company's 24Q1 gross profit margin was 17.43%, a slight decrease of 0.67 pct from the previous year. Analyzing the reason, it is expected that it is mainly due to short-term fluctuations in the product structure, but the overall situation remains relatively stable.

From an expense ratio perspective, the 24Q1 company's sales/management/R&D/finance expense rates were -0.41%/-0.03%/-0.67%/-1.85%, respectively. We expect the sales, management, and R&D expenses to varying degrees. We expect that it is mainly related to the company's large increase in Q1 sales scale and further amortization of expenses. The decrease in financial expenses is clearly expected to be mainly due to a year-on-year increase in exchange earnings (a slight loss in exchange was expected last year, and a small profit is expected this year).

From a net profit perspective, thanks to the company's impressive growth on the revenue side and continued pressure drop on the expense side, the 24Q1 company achieved net profit of 85 million yuan, an increase of 102.33% over the previous year, and a net interest rate of 10.34%, an increase of 2.87 pct over the previous year, and the overall profitability of the company increased significantly.

3. Optimistic about the long-term development trend of the company

In terms of traditional foundry business, the company relies on its core motor technology to continue to develop new customers and categories. The OEM business has achieved a rapid growth trend that is clearly ahead of the industry, and is expected to maintain a strong growth trend in the next few years; automobile steering motor and brake motor business companies also continue to receive targeted projects from related customers. Although the short-term base is low, there is room for medium- to long-term growth. In addition to its main business, the company still relies on its core motor technology to actively lay out a more advanced field of humanoid robots. It is still in the early stages of layout in the short term, but it is expected to open up room for further growth for the company in the future. The company's main business is solid and steady. It can be seen that it is expected to maintain a high growth trend during the period. Emerging businesses will also continue to be developed. We remain optimistic about the company's long-term development trend.

Investment advice: We expect the company to achieve operating income of 36.47, 48.13, and 6.017 billion yuan respectively in 24-26, with year-on-year increases of 31.4%, 32.00%, and 25.00%; net profit attributable to the parent company of 412, 5.15, and 636 million yuan respectively, with year-on-year increases of 27.97%, 24..80%, and 23.59%, respectively. The company's main OEM business relies on customer and category expansion, and will maintain high growth for some time to come. The auto parts business will continue to advance at a pace. The humanoid robot layout opens up room for the company's medium- to long-term imagination. We continue to be optimistic about the company's long-term development trend and maintain the purchase rating.

Risk warning:

1) Trade friction risk: In recent years, the international trade situation represented by the Sino-US trade conflict has changed frequently. The global economy is facing multiple pressures. International trade protectionism is on the rise, and the trend of politicizing trade frictions is becoming more and more prominent, affecting the global economic and trade order and supply chain system. The final sales areas of the company's products are mainly North America and Europe. The overall export business accounts for a relatively high share, which is significantly affected by trade policies. If the external environment, such as trade protectionism and geopolitics, continues to deteriorate, and the company fails to respond in a timely and effective manner, it will adversely affect the company's overall business performance.

2) High customer concentration risk: The company's business is mainly to provide ODM/OEM vacuum cleaners and other products for leading international household appliances companies. During the reporting period, the company's share of sales to the largest customer remained above 50%. High customer concentration may adversely affect the company's production and operation.

3) Risk of fluctuations in raw material prices: The main raw materials purchased by the company include various types of plastic particles (ABS, PP), power cables, hoses, bearings, etc., and their prices are affected by the prices of commodities such as petroleum, rubber, and basic metals. Prices of plastic particles, etc. purchased by the company fluctuated greatly during the reporting period, and may also maintain a large fluctuation in the future.