Camel Co., Ltd. issued an announcement:
1) Release the 2023 annual report: achieved revenue of 14.079 billion yuan/yoy +4.87%, achieved net profit of 572 million yuan/yoy +21.79%, achieved net profit of 535 million yuan/yoy +4.43%; 2) Release of the 2024 quarterly report: achieved revenue of 3.454 billion yuan/yoy +4.84%, achieved net profit of 156 million yuan/yoy -4.86%, achieved net profit deducted from mother 168 million yuan/yoy +35.44%; investment highlights
Steady growth in performance and recovery in profitability
The company achieved revenue of 14.079 billion yuan/yoy +4.87% in 2023, and achieved net profit of 572 million yuan/yoy +21.79%. Performance growth was steady, mainly due to the increase in the gross margin of the company's lead-acid battery business. In 2023, the company's lead-acid battery gross margin was 20.34% /yoy+0.8pct. The increase in gross margin was mainly due to improvements in the company's sales structure, and the high-margin maintenance and replacement market and overseas markets accounted for an increase in the share of the company's business. In the first quarter of 2024, the company's gross margin was 17.28% /yoy+2.06pct/qoq+0.99pct, maintaining a marginal upward trend, driving the company's net profit deducted to 35.44% year-on-year increase to 168 million yuan.
Lead-acid batteries have a significant competitive advantage, and their share continues to increase
The company has been deeply involved in the field of lead-acid batteries for 40 years. It has significant competitive advantages in technology, channels, brands, etc., and its market position is leading in the country and continues to strengthen. In 2023, the company's lead-acid battery business achieved revenue of 10.88 billion yuan/yoy +7.8%. Looking forward to the future, the company's domestic mainframe support, maintenance and replacement, and the three major overseas markets are expected to grow simultaneously, driving the growth of the company's lead-acid battery business: the domestic OEM market has sufficient new targets, the fuel vehicle and new energy vehicle markets are expected to remain stable, and the application of high additional technologies such as AGM is expected to increase the company's unit value and profitability; the maintenance and replacement market company continues to strengthen channel management and brand building, and there is still room for further increase in market share; overseas The marketing company set up an international division to further optimize the international development strategy, and there is plenty of room for growth.
In addition, the company is still promoting production capacity. By the end of 2023, it had a lead-acid battery production capacity of 40 million KVAH and an additional 5 million KVAH in 2023. The company's 40 million KVAH production capacity includes 5 million KVAH overseas production capacity. Through overseas production capacity, we can better serve overseas customers and promote the internationalization process.
Low-voltage lithium batteries are progressing steadily and are expected to gradually contribute to performance flexibility
In 2023, the company's lithium battery business achieved revenue of 85 million yuan/yoy +38%, and the gross margin of the business was -7.91% /yoy-5.42pct. Currently, the company's lithium battery business is still in the early stages of development. The business development is mainly based on obtaining orders. Currently, production capacity utilization is low, so gross margin is low. The company's low-voltage lithium battery business progressed steadily, and received 35 project targets in 2023. Among them, 12V lithium batteries were targeted by various car companies such as Geely, FAW Jiefang, FAW Hongqi, GAC, Dongfeng, JAC, Cyrus, and various models of new car builders; 24V lithium batteries achieved targets for Foton Daimler, BAIC Foton, Beiben Heavy Duty Truck, Great Wall, FAW Jiefang, Geely and other car companies. As new energy vehicles continue to be released in the future, the penetration rate of low-voltage lithium batteries is expected to increase rapidly, driving the development of the company's low-voltage lithium battery business. Since the value of low-voltage lithium batteries is higher than that of lead-acid batteries, the average value of the company's products is expected to increase.
Profit forecasting
The company's net profit for 2024/2025/2026 is estimated to be 7.7/9.3/1.11 billion yuan, EPS is 0.66/0.8/0.95 yuan, and the corresponding PE is 13/11/9 times, respectively. Based on the company's outstanding core competitiveness, rapid expansion of overseas business, and steady growth in overall performance, we are optimistic about the company's medium- to long-term upward development opportunities and give it a “buy” rating.
Risk warning
Competition increases risk; risk of large fluctuations in product prices; downstream demand falls short of expectations; risk of overseas operations; risk of large fluctuations in raw material prices.