On the evening of April 29, the company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved total revenue, net profit after deducting net profit of 45.016 billion, 152 million, and -1,718 billion yuan, respectively, +23.07%, +109.57%, and +38.54% year on year; gross sales margin 11.29%, +2.87pct year on year; net sales margin -0.16%, +4.57pct year on year. The annual results were slightly higher than the forecast value. The first quarter of 2024 achieved total revenue, net profit to mother, net profit after deducting net profit of 11.282 billion yuan, 105 million, and -11 million, respectively, +4.61%, -28.72%, and +89.41% year on year; gross sales margin of 11.44%, -0.13pct year on year; net sales margin of 0.59%, -0.66 pct year on year. The first quarter results were in line with expectations.
The scale effect increased, and profits increased year over year. In the fourth quarter of 2023, the company achieved revenue, net profit attributable to mother, net profit of 11.038 billion, -0.32 billion, and -1,189 billion yuan respectively; +22.97%, +95.94%, +8.64% year-on-month, and -4.6%, -210.34%, and -317.19% month-on-month respectively; gross profit margin of 10.83%, -0.29pct, month-on-month; net sales profit margin -1.52%, +8.24pct year-on-month, and -1.27pct month-on-month, with a slight decrease in gross margin. This is due to rising costs of materials, labor, manufacturing, etc. for various series of products.
The first-quarter results reversed losses and were in line with expectations. In the first quarter of 2024, the company's sales expense ratio, management cost rate, R&D expense ratio, and financial expense ratio were 3.9%, 3.63%, 3.05%, and -0.12%, respectively. The year-on-year increase was +0.77pct, +0.26pct, -0.38pct, and -0.6pct, respectively. Among them, the increase in sales, management, and R&D rates was mainly due to increased R&D investment and increased overseas business scale; the cost rate for the period was 10.47%, +0.05pct year on year.
Increase investment and cultivate new impetus for development. The company's 2024Q4 capital expenditure was 1.82 billion yuan, a record high.
In 2023, the company invested a total of 2,235 billion yuan in R&D, an increase of 21.92% over the previous year, strengthened the implementation and transformation of scientific and technological achievements, released a new brand strategy in April, established the brand value of “leading intelligence with intelligence”, and released the first MPV exclusive architecture for Chinese brands — MUSE co-created the smart electronics architecture. The company has completed the construction of a cost-effective centralized architecture platform and a high-performance computing and communication architecture platform; in the field of intelligent driving, the company's intelligent driving iterative upgrade, L2+ products have been launched in batches, and the core technology of highly autonomous driving has been applied to models such as autonomous minibuses and unmanned logistics cars; in the smart cockpit field, the company has an open software ecosystem that supports personalized interactive experiences such as mobile phone and vehicle touch and transmission; in the field of intelligent services, the company has implemented OTA upgrades of mobile apps and automated system pressure testing and development, and applied them in some models.
Empowered by technological achievements, new cars are being released at an accelerated pace. In 2023, Jiangqi Group achieved positive double-digit sales growth in the commercial vehicle, passenger car, and bus sectors. Among them, total sales of commercial vehicles were 231,100 units, up 18.34% year on year; total sales of passenger cars were 357,000 units, up 18.21% year on year; total sales of 4,323 passenger cars were sold, up 41.14% year on year. While stabilizing the commercial vehicle, pickup truck, heavy truck, and bus business, the company continued to break through in the passenger car business, actively transforming into high value-added products, and successively launched new products such as QXPHEV, Ruifeng E3, M3/M4 CNG, and Xingrui pure electric models, effectively increasing its marginal contribution. In 2024, the MPV Ruifeng RF8, equipped with the Huawei motor system, was officially launched, and batch delivery has been achieved in many parts of the country. Sales continue to rise, and revenue is expected to increase further.
Seize global opportunities and grow overseas. The company exported a total of 169,600 vehicles in 2023, an increase of 47.99% over the previous year. Of these, 134,000 vehicles were delivered in the “Belt and Road” joint construction countries, an increase of 63.7% over the previous year. The scale efficiency of overseas business achieved double growth, which was superior to the industry, and continued to consolidate its position in overseas markets. In the first quarter of 2024, the company exported a total of 57,600 vehicles, an increase of 24.75% over the previous year. In January 2023, the company held a launch ceremony for 500 e-JS4 units exported to Norway and 100 electric light trucks from France and Spain, marking the company's official entry into traditional automobile industry powerhouses such as Northern Europe and Western Europe; in March, 1,000 high-end pickups were exported to Europe, marking the company's success in opening the European pickup market and completing the final puzzle of globalization. Since 1990, the company has spread across 132 countries and regions on five continents, sold nearly 1.4 million vehicles, and established 4 wholly-owned subsidiaries, 3 joint ventures, and 19 overseas KD factories to provide new momentum for its steady growth.
Deepen open cooperation and nurture development potential. The company signed the “Smart New Energy Vehicle Cooperation Agreement” with Huawei terminals in December 2023. Relying on Huawei's intelligent ecosystem and strong brand effect, the two sides will cooperate comprehensively in various fields such as product development, manufacturing, sales, and service based on Huawei smart car solutions to build luxury intelligent connected electric vehicles. The company has officially become a partner of Huawei Smart Car Choice, and cooperation with Huawei is expected to push the company's passenger car business to a new level.
Investment advice: Benefiting from the recovery of the domestic commercial vehicle industry and strong passenger car exports, the company's independent business is recovering well and is profitable in the first quarter. The company and Huawei have officially reached an intelligent car model cooperation to focus on building luxury intelligent connected electric vehicles. Currently, Huawei's smart car business has gradually entered a healthy track, and Cyrus has already achieved profits in the first quarter of this year. Cooperation with Huawei is expected to push the company's passenger car business to a new level and maintain an “increase” investment rating.
Risk warning: 1) Downstream demand falls short of expectations; 2) The deteriorating competitive landscape exceeds expectations.