Incident: On May 21, the company issued an announcement to increase executive holdings. Mr. Shi Xiaoguang, the director and deputy general manager of the company, increased his holdings of the company by 21,000 shares at an average price of 77.91 yuan, accounting for 0.0317% of the company's total share capital, and the transaction amount was 1.6361 million yuan. Prior to the increase in holdings, Mr. Shi Xiaoguang directly held 4.418,400 shares of the company, accounting for 6.6665% of the company's total share capital. Previously, at the end of 2023, the company's directors and secretaries had increased their holdings by 3800 shares.
This increase in holdings highlights the executives' recognition of the company's value and confidence in future development.
Equity incentives affect the calculation of expenses, and profits are expected to improve quarterly with cost reduction and efficiency. 2024Q1 has a gross sales margin of 38.04% and a net sales profit margin of 10.00%. The company's share payments, overseas development expenses, and increased R&D investment have led to an increase in short-term expenses, putting pressure on profits. On the one hand, the company is strengthening cost management, actively promoting automation transformation, and implementing strong measures to reduce costs and increase efficiency; on the other hand, the company is full of orders, shipments increased rapidly in April and May, and profitability is expected to improve quarterly.
The middle and high-end market has a leading edge, and overseas expansion can be expected in the future. The company has a wide range of products. Among them, the leading products are power fuses. As the penetration rate of 800V high-voltage fast charging for new energy vehicles increases, the company encourages high-end products such as fuses and smart fuses to welcome rapid release. At the same time, new energy vehicles are in urgent demand for high-safety and intelligent products, and the company actively invests in efuse and other product resources, and there is broad room for future development. Overseas, the company's overseas revenue in 2023 was 60 million yuan, +102.01% year-on-year. The company's Thai factory will gradually be commissioned and completed to achieve mass production in 2024, and the overseas business is expected to contribute to significant performance increases in the future.
Diversified products have been launched one after another, actively exploring new fields of application. The company's newly launched special protection device for fuse lightning protection has formed multiple series and specifications, and can be used in wind power, photovoltaics, energy storage and charging piles industries. The company's newly launched patch products can be used in new energy vehicles, new energy wind power generation, energy storage, communications and consumer markets, etc. The new products are expected to achieve major breakthroughs in segmented fields.
Investment advice: We expect the company's net profit to reach 200/3.70/480 million yuan in 24-26, +70.8%/+85.3%/+29.6% year-on-year, corresponding EPS of 3.01/5.59/7.24 yuan, maintaining the “gain” rating.
Risk warning: downstream demand falls short of expectations; raw material prices fluctuate greatly; industry competition intensifies