公司2024 年Q2 的综合毛利率为27.78%，同比-0.78 pct，环比+0.34 pct，同环比均基本持平。公司2024 年Q2 的期间费用率为26.49%，同比+4.08 pct，环比+1.33pct，其中管理费用与财务费用增加较多，管理费用增加主要由于境内外新公司前期投入较大，财务费用增加主要由于银行利息同比减少以及宝盈（墨西哥）汇兑收益增加。公司2024 年Q2 的资产减值损失与信用减值损失分别为449 和1040 万元，合计同比增加1191 万元，其中资产减值损失主要由于存货跌价、信用减值损失主要由于应收账款坏账损失增加。公司2024 年Q2 实现归母净利润-0.03 亿元，同比减少113.6%，环比减少123.3%。Incident: On August 19, Ming Xin Xuteng released its 2024 mid-year report, achieving revenue of 0.466 billion yuan, a year-on-year increase of 26.36%; net profit to mother of 0.01 billion yuan, a year-on-year decrease of 39.89%.
The company's revenue grew steadily in Q2 2024, with short-term disturbances leading to losses:
The company achieved revenue of 0.242 billion yuan in Q2 2024, up 10.14% year on year and 8.07% month on month, maintaining steady growth. With traditional customers FAW-Volkswagen, SAIC-Volkswagen, and SAIC-GM reducing the allocation of interior materials, and Q2 sales in 2024 decreased by 23.7%, 4.7%, and 57% year-on-year, respectively, the company's revenue still achieved positive growth, mainly due to the gradual expansion of projects for independent customers such as Chery, BYD, Xiaopeng, Avita, and Wenjie, and the share of independent customer revenue continued to increase.
The company's comprehensive gross margin for Q2 2024 was 27.78%, -0.78 pct year over year and +0.34 pct month on month, all of which were basically the same. The company's expense ratio for the 2024 Q2 period was 26.49%, +4.08 pct year on year and +1.33 pct month over month. Among them, management expenses and financial expenses increased a lot. The increase in management expenses was mainly due to the large upfront investment of new domestic and foreign companies. The increase in financial expenses was mainly due to a year-on-year decrease in bank interest and an increase in exchange earnings from Prowin (Mexico). The company's asset impairment losses and credit impairment losses in Q2 2024 were 449 million yuan and 10.4 million yuan respectively, a total increase of 11.91 million yuan over the same period last year. Among them, asset impairment losses were mainly due to falling inventory prices, and credit impairment losses were mainly due to increased losses on bad accounts receivable. The company achieved net profit to mother of -0.003 billion yuan in Q2 2024, a year-on-year decrease of 113.6% and a year-on-month decrease of 123.3%.
The company's net cash flow from Q2 operations in 2024 was -0.098 billion yuan, mainly due to overdue payments from some customers, mass production of various models at the beginning of the year, and increased procurement of raw materials.
Actively promoting customer autonomy and business globalization, the company is expected to maintain rapid growth in the future:
We believe that four core factors will drive the company's high performance growth in the future: 1) Optimization of the customer structure of the leather business and the decline in raw material prices. Traditional customers in the company's leather business include joint venture OEMs such as Volkswagen, Audi, and GM. In recent years, the company has actively expanded its own brand customers and has achieved supporting supplies for customers such as Xiaopeng, Nana, and Avita. The price of leather raw materials has gradually declined since 2022. As of June 2024, the import prices of salted cowhide and blue wet cowhide have fallen by 34.5% and 47.1%, respectively, compared to the highest points in 2021. The profitability of the company's leather business is expected to gradually recover 2) Suede microfiber has large space and excellent layout, and the project expansion is extremely smooth. At present, suede microfiber has gradually been installed in mainstream models of around 0.1-0.2 million, such as the Dolphin, Seal, etc. The main participants in the industry are Japan's Toray, Alcantara, and Mingxin Xuteng, and the company has advantages such as environmental protection, price, and localized supply. At present, the company has been able to support many OEMs such as Volkswagen, Audi, Avita, Wanjie, and Jietu. The company actively promotes self-production of suede microfiber core chemicals. Currently, it has achieved self-production of chemicals such as masterbatches. In the future, it is expected that it will further self-manufacture the core chemical water-based polyurethane, and profitability is expected to continue to increase.
3) Gradually expand other interior materials and transform into a comprehensive solution provider for interior materials. The company has now successfully developed and achieved mass production of materials such as veneered microfiber, PU, and PVC, filling the gap in mid-range and low-end products, and actively developing cutting-edge research and development of new materials such as silicone leather. Furthermore, some of the core chemicals in microfiber, PU, and PV can be used universally, thereby achieving scale effects and effective cost reduction.
4) To promote business globalization, the company will establish new wholly-owned subsidiaries Bauying (Mexico) and Prowin (US) in 2023. Prowin Mexico plans to officially start production in 2024. With the commissioning of overseas factories, the company is expected to gradually expand local and neighboring country OEMs in the future.
Investment advice: Maintain a “buy-A” rating. We expect the company's gross profit from 2024 to 2026 to be 0.05/0.11/0.18 billion yuan respectively (the reduction was mainly due to the company's loss in Q2 2024), corresponding to the current market value, PE 44.9/18.1/11.4 times. Considering that the company's multiple projects have been postponed to mass production until 2025, and that the Mexican plant will be fully put into operation in 2025, we have given the company 25 times PE in 2025, corresponding to a target price of 17.5 yuan/share for 12 months.
Risk warning: technology and product development risks, customer concentration risks, and declining gross margin risks.
