Incident 1: On April 29, 2024, the company released its report for the first quarter of 2024. The report shows that in the first quarter of 2024, the company achieved operating income of 5.287 billion yuan, an increase of 3.45% year on year and a decrease of 6.1% month on month; net profit due to mother was 0.19 million yuan, up 68.23% year on year, down 62% month on month; net profit without return to mother was 16 million yuan, down 75.56% year on year.
Incident 2: On April 29, 2024, the company announced that it was designated for the German BMW passenger car seat assembly project. Grammer Jifeng (Germany) has become a German BMW seat assembly supplier. It will develop and produce front and rear seat assembly products for BMW in Europe as a passenger car seat project under a new platform.
It is estimated that starting in the second half of 2027, the life cycle will be 8 years, and the total life cycle amount will be 12 billion yuan.
Results were under pressure in the short term, mainly due to the decline in Grammer's profit in the first quarter, and the guidance remained unchanged throughout the year. Grammer's 2024Q1 revenue was 557 million euros, up 5.52% year on year and down 2.42% month on month. Among them, revenue in Europe and the Asia-Pacific region was mainly due to the company taking prudent measures to deal with the major and ongoing macroeconomic situation and uncertainty in specific industries. In 2024Q1, Grammer achieved an EBIT of 3.9 million euros, an increase of 66.67% year over year and a year-on-month decrease of 66.09%, mainly due to falling revenue, rising costs due to fluctuations in factory capacity utilization, climbing costs for new commercial vehicle plants in the US, and exchange gains and losses. The full-year guidance remains unchanged, and Grammer's 2024 revenue and profit remain the same as in the 2023 annual report. It is expected to achieve revenue of 2.3 billion euros and an operating EBIT of 75 million euros.
Achieved a breakthrough in the global strategy from 0 to 1, and obtained passenger car seat designation for the new BMW platform in Germany.
The company received an order for high-end seats from overseas for the first time. On the basis of receiving targets for Audi and Volkswagen passenger car seat assembly projects, the company once again obtained project targets from the German luxury car brand BMW, and the company's global passenger car seat strategy achieved a breakthrough from 0 to 1. The company currently has orders for 10 seats, and mass production is expected to begin in 24. With the gradual implementation of the project and the catalysis of new projects, it is expected to achieve break-even as soon as possible.
Grammer's business continues to advance, and it is expected to turn a loss into a profit as soon as possible. After the company acquired Grammer, it was in a painful period of integration in the early stages. Profitability was affected by rising raw materials, epidemic containment, and the shortage of chips in the Russian-Ukrainian conflict. Since Grammer Global COO Mr. Li Guoqiang took office, he has vigorously promoted comprehensive cost reduction and efficiency measures with the goal of improving profitability. By region: The European region has stable operations and the highest revenue scale; the Asian region continues to expand its scale; the American region benefits from cost reduction and efficiency, and the subsidy mechanism for rising raw material prices continues to reduce losses. Grammer's ability to operate has been improved through adjustments to the company's management structure and organizational structure, more measures to reduce costs and increase efficiency, and the integration of the layout of production bases.
Profit forecast: In 2024-2026, the company is expected to achieve revenue of 238.09, 279.82, and 31,069 billion yuan, an increase of 10.37%, 17.52%, and 11.03%; in 2024-2026, net profit to mother will be 5.04, 10.42, and 1,289 billion yuan, corresponding PE of 33, 16, and 13 times, respectively, giving a “recommended” rating.
Risk warning: Competition in the passenger car industry intensifies, sales fall short of expectations; promotion of new products falls short of expectations; risk of rising raw material costs and prices, etc.