Yutong Bus is a leader in the bus industry. The company achieved cumulative sales of 36,518 buses in 2023, up 20.93% year on year; achieved operating income of 27.042 billion yuan, up 24.05% year on year; realized net profit attributable to shareholders of listed companies of 1,817 billion yuan, an increase of 139.36% year on year. Yutong sold 102 thousand units overseas in 2023, a year-on-year increase of 79%. New energy vehicle sales volume was 0.78 million units, -37% year over year.
The overseas bus market space is expected to continue to expand. According to the company's 2023 annual report, the overseas bus market is in a phase of restorative growth. In 2023, China's bus industry exported 32,000 units, a significant increase of 49% over the same period last year. The overseas bus market will continue to grow in 2024. Among them, the export sector is expected to continue to grow, driven by economic recovery, increased demand for new energy vehicles, improved demand environment for resource-based markets, and multilateral/bilateral trade agreements.
The Chinese bus went out to sea smoothly. According to Yutong Bus's 2023 annual report, the export growth rate of China's bus industry is higher than the increase in total demand in overseas markets due to continuously improving technical standards and supply chain advantages (especially new energy buses). According to data from the China Bus Statistics Information Network, in 2023, China exported 32,185 large and medium-sized buses (≥7 meters), an increase of 48.63% over the previous year.
Yutong's active expansion into overseas markets has begun to bear fruit. According to Yutong Bus's 2023 annual report, the company's overseas sales have covered six major regions, including Europe, the CIS, America, Africa, Asia Pacific, and the Middle East. At present, the company has formed a virtuous cycle of transforming industrial achievements and feeding back technological innovation. While consolidating its position as the number one brand, it has also driven the improvement of the overall technical level of the industry. According to Shanghai Securities e-Interaction, by the end of 2023, the company had exported nearly 100,000 buses of all types and exported more than 4,800 new energy buses.
We believe that Yutong's leading position in NEV is stable. The company optimizes product layout and comprehensively improves product quality levels by achieving “mid-high-end and de-low-end”. Continue to maintain product leadership through product functional performance and differentiation of featured products. At the same time, Yutong collaborated with more than 100 NEV core component companies, including Suzhou Huichuan and Beijing Yihuatong, to achieve collaborative research and development of NEVs with high adaptability and high safety. The layout fosters core component companies such as Jingyida and Colin to give full play to the advantages of domestic industrial chain clusters.
We expect the company's revenue for 2024/25/26 to be 331/390/46.1 billion yuan, respectively, net profit to mother of 28.7/33.8/4.22 billion yuan, and EPS of 1.30/1.53/1.91 yuan respectively. Corresponding to the closing price on June 5, 2024, PE was 19/16/13 times, respectively. Considering that the company is an industry leader and has strong certainty, refer to comparable companies and give the company 21-23 times PE in 2024, with a reasonable value range of 27.23-29.83 yuan. The first coverage gave it an “superior to the market” rating.
Risk warning: Global economic growth falls short of expectations, and raw material prices have risen sharply.