Rapid growth was achieved in 2023, and new business acceptance reached a record high. In 2023, the company achieved operating income of 20.52 billion yuan, a year-on-year increase of 18.6%, net profit of 1.90 billion yuan, a year-on-year increase of 26.8%, gross profit margin of 27.4%, a year-on-year decrease of 0.25 percentage points. The overall operating performance was excellent. At the same time, the company's new business acceptance reached a record high in 2023. Battery boxes, car body chassis structural parts, and intelligent products have all made good progress and breakthroughs.

Battery box: Continue to expand penetration and business area footprint. In 2023, the battery box business of the company and Volkswagen extended from Europe to China, and the battery case business with Volvo expanded from China to Europe. At the same time, it also seized opportunities in the North American market, breaking through the battery case business of Nissan, Strantis, Hyundai Kia and other customers in the North American market for the first time. The battery box production process was also expanded, and the first order for an integrated die-cast battery case for a hybrid model was obtained.

Intelligent products: continuous deepening and achieving many first breakthroughs. In 2023, the company's intelligent products include electric door systems, front and rear light-emitting masks, light-emitting bumpers, light-emitting grilles, active air intake grilles, and variable spoilers. Customers include Chinese brands, European brands, Japanese brands, and well-known technology companies in the field of cross-border automobiles.

Investment advice. A diversified product portfolio and an increasingly balanced customer structure will strongly support the long-term sustainable growth of the company's performance. We expect the company's net profit to be $2.18 billion, $2.49 billion, and $2.94 billion, respectively, and EPS of $1.88, $2.15, and $2.53, respectively. Considering the company's global advantages, we will give 10-12 times PE in 2024, corresponding to a reasonable value range of HK$20.21-24.25 (HK$1 = RMB 0.9303), giving it a “superior to the market” rating.

Risk warning. New energy vehicle sales risk, auto parts price reduction risk, raw material price increase risk.