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On January 25-26, 2024, China Securities Regulatory Commission held the 2024 System Work Conference and emphasized that it should highlight the concept of investor orientation. To help investors better understand the real development situation and value of the enterprise, further protect the legitimate rights and interests of investors, etc., Caijing.com and 'Science and Technology Innovation Board Daily' jointly created the 'Shareholders Meeting in Perspective' column.

The "Direct Shareholders' Meeting" section reports on-site, facing the core management such as the chairman of the listed company directly at the shareholders' meeting, focusing on long-term business strategies, major decisions, operational guidelines, aiming to enhance the company's image in the capital market, optimize investor relations management, and improve governance and development of the listed company.

This issue's company:

Autel Intelligent Technology Corp.,Ltd.

Company profile

In the automotive comprehensive diagnosis and testing industry, Autel Intelligent Technology Corp.,Ltd. is engaged in the research and development, production, sales, and service of automotive comprehensive diagnosis, testing analysis systems, and automotive electronic components; in the new energy industry, the company provides customers with intelligent charging network solutions, one-stop light storage and charging energy management solutions.

Company Highlights

Autel Intelligent Technology Corp.,Ltd. focuses on the overseas automotive aftermarket mainly in North America and Europe, and has become one of the leading companies in the global automotive aftermarket intelligent comprehensive diagnostic testing field. In the digital energy business, the company has core technologies such as power electronics, AI, cloud and big data, vehicle-cloud compatibility, intelligent operation and maintenance, EMS, etc.

Business model

According to the customer's procurement products and services, it can be divided into distribution and direct sales models. Combining downstream market demand and its own product characteristics, comprehensive diagnostic products, TPMS, and ADAS products adopt a sales model with distribution as the main focus and direct sales as the auxiliary. The charging pile products adopt a sales model with direct sales as the main focus and distribution as the auxiliary.

"Star Daily" news on October 28th (Reporter Yu Jiaxin) "Autel Intelligent Technology is still very stable in the automotive testing field, but in the new energy track, although its performance is growing rapidly, the uncertainties in this track are relatively greater." At the end of Autel Intelligent Technology's third extraordinary shareholders' meeting in 2024, an investor present at the meeting told reporters from "Star Daily".

At this shareholders' meeting, both Li Hongjing, Chairman and General Manager of Autel Intelligent Technology, and Li Xiongwei, the Secretary to the Board, did not attend the meeting in person due to business trips, and the former Chief Financial Officer, Fan Ying, announced her departure not long ago. However, reporters from "Star Daily" noticed that Li Lu, the former Secretary to the Board who left in March this year, is still employed by the company and holds the position of "Director of Investor Relations".

At the shareholders' meeting, Autel Intelligent Technology deliberated and passed the proposals regarding the "Company's 2024 Employee Stock Ownership Plan (Draft)" and its summary, as well as the proposals regarding the "Company's 2024 Restricted Stock Incentive Plan (Draft)" and its summary, etc.

Stock incentive plan annual performance targets may be achieved ahead of schedule, with increased investment in research and development of charging modules and more.

On the day of the shareholders' meeting, the performance assessment targets mentioned in the "Company's 2024 Restricted Stock Incentive Plan (Draft)" were reviewed. The first performance assessment target is "based on the net income in 2023, the net income growth rate in 2024 shall not be less than 200%."

Looking back at 2023, Autel Intelligent Technology Corp., Ltd. achieved a full-year net income of 0.179 billion yuan, according to the above performance assessment target calculation, the net income for 2024 needs to exceed 0.537 billion yuan.

The third quarter report shows that from January to September 2024, Autel Intelligent Technology Corp., Ltd. achieved a net income attributable to the parent company of 0.541 billion yuan, a year-on-year increase of 103.08%. It can be seen that the company's net income for the first three quarters has already exceeded the 2024 performance assessment target. If the company does not incur losses in the fourth quarter of this year or achieves the target for the current period.

On the day of the shareholders' meeting, individuals close to Autel Intelligent Technology Corp., Ltd. told reporters from the Star Daily that, judging from the industry situation, the performance targets set by the company are not low.

Regarding the performance expectations for the fourth quarter of this year, the above-mentioned individuals stated that the company's profit is influenced by many factors, including fluctuations in foreign exchange rates, research and development costs, sales expenses required for new product development, and the expenses of stock-based incentive shares in 2021.

Autel Intelligent Technology Corp., Ltd. is engaged in the automotive comprehensive diagnostic and testing industry, and entered the new energy field in 2021. It stated that digital repair business is the company's basic support, representing its first development curve of sustained leadership and steady growth; digital energy business represents the company's high-speed growth second development curve, with revenue for the first three quarters of this year already exceeding the full-year revenue in 2023.

In the first three quarters of this year, Autel Intelligent Technology Corp., Ltd. achieved revenue of 2.804 billion yuan, a year-on-year increase of 28.07%. Among them, the digital repair business (including automotive comprehensive diagnostic products, TPMS products, ADAS products, etc.) realized revenue of 2.178 billion yuan, a year-on-year increase of 20.11%; the digital energy business realized revenue of 0.591 billion yuan, a year-on-year increase of 77.77%.

In terms of research and development investment, according to the semi-annual report, the company currently has multiple ongoing projects related to the charging business, with expected total investments of 0.147 billion yuan, 0.125 billion yuan, and 0.152 billion yuan for the 'Second Generation Ultra-Fast Integrated Charging Product Project,' 'Bidirectional Charging Module Project,' and 'Liquid-Cooled Charging Module Project,' respectively; cumulative investment amounts are 84.2316 million yuan, 30.4489 million yuan, and 1708.24 million yuan.

The aforementioned investors also told the 'Star Market Daily' reporter that the company currently has a significant research and development investment in new energy and new products. Looking at the charging module, it has a relatively high proportion of research and development costs in charging pile, and improving self-research capabilities helps in cost control.

According to autel intelligent technology corp.,ltd. disclosure, its next-generation digital energy products can achieve a unified platform of 120kW-1440kW, adaptable to all scenarios. From the cost perspective, the next-generation products use a minimalist platform architecture, significantly reducing costs; on the revenue end, helping customers reduce expenses and increase revenue through light stacking, storage stacking, and distributed architecture.

More than half of the revenue comes from North America, with policies and other factors being of concern.

In terms of region, the aforementioned investors stated that autel intelligent technology corp.,ltd. generates most of its revenue from overseas, mainly from the USA. According to the semi-annual report, the company's business revenue from North America was 0.955 billion yuan, with a year-on-year growth of approximately 30.93%, accounting for about 52.6% of the total revenue.

Looking at the digital energy business, autel intelligent technology corp.,ltd. also mentioned in recent surveys that North America remains its primary sales region for digital energy, followed by Europe; other regions like the Middle East, Asia-Pacific markets also maintain a high growth rate. The highest gross margin is in the North American market, followed by Europe, and then Asia.

autel intelligent technology corp.,ltd. stated that in the second to third quarters of 2024, the digital energy business has made significant progress in self-operated e-commerce and large customer expansion in the US market, with a stable gross margin. Investors mentioned that compared to the relatively scattered European customers, there are more large customers in North America. At the same time, the company has been present in the North American market for over 20 years and has advantages in brand recognition and localized services.

Overall, the threshold for overseas charging pile business is relatively high. The above-mentioned individuals stated that European and American certification is the most basic threshold for exporting products, and the related standards are higher than national certifications. In terms of individual customer standards, they often require higher levels of certification, necessitating more competitive products. Additionally, emphasizing after-sales service is a major characteristic of overseas markets. Investors stated that the company focuses on localization development and has currently established more than 14 overseas regional headquarters, sales platforms, and subsidiaries worldwide.

However, for overseas uncertainties and policy issues, some investors mentioned many uncertainties to reporters from the Star Daily. In response, Autel Intelligent Technology Corp., Ltd. expressed that the products currently sold in North America include diagnostic equipment and charging station equipment, all of which are civilian products and not in the focus industries.

Autel Intelligent Technology Corp., Ltd.'s factory in North Carolina, USA officially started production at the end of 2023. "The U.S. factory has the advantage of local production and customer service in the United States, which is a series of important strategic layouts for the company to deal with the uncertainties of international trade environment changes."