On the evening of April 29, the company released its 2024 quarterly report, achieving revenue of 7.8, 1.15, and 110 million yuan respectively; -5.53%, +7.83%, and +9.16% year-on-year respectively. Gross profit margin 23.15%, year-on-year +0.57pct; net sales margin 14.67%, year-on-year +1.77pct.
24Q1 gross margin increased and profitability improved. In the first quarter of 2024, the company's gross sales margin was 23.15%, +2.58pct month-on-month; net sales margin was 14.67%, +5.32pct month-on-month. Affected by the company's mold business adjustments, revenue in the first quarter declined slightly year-on-year; there was an increase on the profit side, mainly due to changes in the mold and parts business structure. The gross margin of parts was relatively higher and accounted for a larger share. 24Q1 The company's sales expense ratio, management cost rate, R&D expense ratio, and financial expense ratio were 0.38%, 3.72%, 2.18%, and -0.26%, respectively. The year-on-year increase was +0.02pct, +1.05pct, -1.21pct, and -0.74pct, respectively. The increase in management expenses was mainly due to the commencement of operation at some of the company's production bases; the cost rate for the period was 6.03%, -0.88pct. The company promoted continuous cost optimization, and its ability to control expenses remained basically stable.
Production capacity is expanding at an accelerated pace, and the leading position continues to be consolidated. As a leader in domestic automobile stamping parts, the company has now planned to build a number of large-scale die-casting production lines, mainly at factories in Yancheng, Changzhou and Anhui, Jiangsu. Among them, the 6100-ton die-casting production line in Yancheng, Jiangsu has achieved mass production and product sales; the 9200T oversized die-casting island at Dolly Technology's Yancheng plant was also put into production in December last year. According to the company's announcement in September 2023, the company received a targeted offer from a leading domestic NEV manufacturer to provide them with integrated die-cast floor parts. The project is expected to start production in 2025, with an estimated additional sales revenue of about 21-2.3 billion yuan during the life cycle. At the beginning of this year, the company and the Swiss Bühler Group successfully renewed the purchase contract for 4 sets of Carat 920 die-casting islands, setting the largest single order for Bühler's oversized die-casting equipment, which will be delivered one after another from the second to the third quarter of 2024. In addition, the company's parts and integrated chassis structural parts project in the Jintan Economic Development Zone plans to build 8 fully automatic integrated large-scale die-casting production lines and 5 automated stamping and welding production lines. It is expected that the underground engineering part has been completed. It is expected to enter the installation and commissioning production line in May, and trial production will be carried out in July. After the project is delivered, it will have the capacity to produce 600,000 sets of integrated die-castings and 10 million stamped welding parts per year. The company's output value is expected to increase further after production.
Investment advice: The company is a leading domestic stamping parts company. Its operating capacity is outstanding. Revenue declined slightly in the first quarter, but the profit level is still steady. As the industry recovers seasonally, we expect the company's revenue to grow steadily. We expect profits of 6.05, 7.03, and 765 million yuan in 2024, 2025, and 2026, corresponding to 11.7, 10.1, and 9.2 X PE, respectively, and continue to be highly recommended!
Risk warning: Overseas market expansion falls short of expectations, and downstream demand falls short of expectations.