Achieve net profit to mother, reverse loss to profit in Q1 2024
On April 29, the company released the 2023 Annual Report and the 2024 First Quarter Report. In 2023, the company achieved total revenue of 35.842 billion yuan, +5.09% year-on-year, net profit to mother of 2,450 million yuan, a year-on-year decrease of 1,382 billion yuan, after deducting non-attributable net profit of 4.817 billion yuan, an increase of 521 million yuan over the previous year.
In the first quarter of 2024, the company achieved total revenue of 26.561 billion yuan, +421.8% year-on-month, and net profit of 220 million yuan, an increase of 845 million yuan over -625 million yuan in Q1 in 2023, turning net profit to mother into profit. Compared with -156 million yuan in Q4 2023, the net profit after deducting net profit of 114 million yuan was increased by 1,038 million yuan. This is an increase of 1.916 billion yuan compared to -1,802 billion yuan in Q4 2023.
2024Q1 gross margin improved dramatically. With good cost control during the period, the company's gross sales margin in 2023 was 10.39%, -0.93pct year on year. The sales expense ratio, management cost rate, and R&D expense ratio were 15.25%, 4.61%, and 4.73%, respectively, compared with +1.12pct, -0.60pct, and +0.88pct.
The company's gross sales margin for the first quarter of 2024 was 21.51%, +12.63pct year on year and +7.97pct month-on-month. The gross sales margin improved significantly, mainly benefiting from the increase in sales volume of the new M7, which accelerated the scale effect. The sales expense ratio, management cost rate, and R&D expense ratio were 12.82%, 1.70%, and 3.59%, respectively, -1.76pct, -1.49pct, and +0.43pct month-on-month.
The Questionnaire series is equipped with industry-leading technology and successfully enters the Chinese luxury car market
In 2023, the company successively launched the AITO Challenge M5 smart driving version, the new M7 and M9, equipped with industry-leading technical attributes such as intelligent driving, smart cockpit, smart chassis, and smart range extension, and quickly occupied the market. The sales volume and revenue of new energy vehicles reached record highs throughout the year. In 2023, sales of new energy vehicles were 159,900 units, up 11.75% year over year. With the increase in sales volume of the new M7, the accelerated scale effect became apparent, and the company's gross sales margin increased sharply to 21.51% in 2024Q1.
Wenjie M9 successfully entered the Chinese luxury car market: As of June 26, the Wenjie M9 had been on the market for 6 months, with a cumulative total of over 100,000 units. Staying the top spot in luxury car sales of over 500,000, setting a new sales record for luxury brand models in the Chinese market.
Profit forecasting
The company's revenue for 2024-2026 is 1,402, 1665, and 195.9 billion yuan, respectively, and EPS is 2.95, 3.22, and 3.85 yuan, respectively. The current stock price corresponds to 0.9, 0.8, and 0.7 times PS, respectively. Considering the gradual stabilization of the company's position as a new high-end brand in China, which has great potential for future growth, it maintains a “buy” investment rating.
Risk warning
(1) The promotion of new models fell short of expectations; (2) automobile consumer demand fell short of expectations; (3) the progress of cooperation with Huawei fell short of expectations.