Matters:
The company released its 2024 annual report, with revenue of 3.59 billion yuan, net profit to mother of 0.425 billion yuan, -14% YoY, net profit of 0.396 billion yuan (YoY), and -17% YoY.
Comments:
4Q24's revenue is in line with the performance of major customers: revenue of 1.1 billion yuan, -5%/+16%, corresponding to major customer T Chinese wholesale -3%/-3%, ideal wholesale +25%/+5%, SAIC Motor Group -17%/+66% year-on-month, dragged down by T and SAIC Motor, but the month-on-month growth estimates mainly relied on SAIC Motor. In 2024, the company's revenue was 3.59 billion yuan, or -8%, of which export sales were 0.14 billion yuan, or -51%; by business, auto parts were 3.32 billion yuan, or -5% year over year, mainly related to the weak annual sales performance of major customer T China. In addition, it is estimated that there was also a price reduction effect caused by increased industry competition; stamping molds were 0.1 billion yuan, -50% year over year, and mold revenue often increased along with mass production of new projects. The total life cycle of the company 11M24 and 2M25 was announced The project target of 2.5-3 billion yuan is expected to provide strong support for 2025 revenue.
4Q results were in line with expectations, with significant impairment: net profit due to mother 0.083 billion yuan, -24%/-32%, net interest rate 7.5%, year-on-month -1.9PP/-5.3PP, net non-return profit 0.061 billion yuan, 41%/-50% year-on-month, specifically:
1) Gross profit margin: 18.8%, -1.8PP/ -2.8PP compared to the same period last month. It is estimated that part was affected by equipment conversion, and partly related to seasonal confirmation differences in high-margin scrap aluminum sales.
2) Cost ratio: 7.4%, +3.2PP/+1.2PP, of which the management rate is 3.2%, +0.7PP/month over month, R&D rate 4.3%, +2.8PP/+1.2PP, the company's 11M24 and 2M25 together announced a project target of 2.5-3 billion yuan in life cycle. It is estimated that the increase in ongoing projects will lead to an increase in R&D investment.
3) Impairment: Total asset and credit impairment was 0.048 billion yuan, 4Q23 was a loss of 0.072 billion yuan, and 3Q24 was a loss of 0.016 billion yuan.
The invisible king of stamping, a new star in integrated die-casting and thermoforming, multiple layouts support medium- to long-term development:
1) In terms of stamping, the company started with supporting SAIC Motor, obtained an ideal target in 2018, became a Tesla supplier in 2019, and carried out a new energy transformation earlier. Although the company's profitability has declined due to increased competition in the past 2 years, it is still one of the few companies in the stamping industry with a gross profit margin of 20% + and a net profit margin of 10% +.
2) In terms of integrated die casting, the company's current main products include steel and aluminum stamped body structural parts. The understanding of vehicle design and structure will be superior to most die-casting peers who have no experience in structural parts production. This helps improve the yield and efficiency of the company's integrated die-casting. The company is one of the earliest companies in the industry to mass-produce integrated die-casting. At the same time, 11M24 and 2M25 companies each announced that they have obtained new integrated die-casting targets, reflecting the company's strong competitiveness in the medium to long term.
3) In terms of thermoforming, the company's original stamping technology is cold stamping. Thermoforming requires higher equipment and process, but it can be more valuable. It is a process that the company has focused on expanding in recent years. 2M25 announced that it has been designated for thermoformed parts by 6 domestic automobile manufacturers and 1 parts company, indicating that the company has been recognized by customers in its new business.
Investment advice: The company's 4Q performance was under short-term pressure due to impairment and other factors, but revenue basically recovered to a quarterly historical high. According to the 2024 annual report, we adjusted the company's 2025-2026 net profit forecast from 0.6 billion yuan and 0.7 billion yuan to 0.47 billion yuan, and introduced the 2027 net profit forecast of 0.58 billion yuan, corresponding to growth rates of +10%, +14%, and +10%, corresponding to the current PE 12.7 times, 11.1 times, and 10.2 times. According to the company's historical valuation, we gave the company a target PE of 15 times in 2025, with a target price of 29.3 yuan, maintaining a “recommended” rating.
Risk warning: The development of integrated die-casting technology and industry demand fell short of expectations, the expansion of new integrated die-casting customers fell short of expectations, overseas demand and domestic consumption fell short of expectations, and raw material prices exceeded expectations.
