Key points of the announcement: The company announced its semi-annual report for 2023, and the performance is in line with our expectations. 2023H1 achieved operating income of 949 million yuan, an increase of 24.26% over the previous year; realized net profit attributable to the parent company was 24 million yuan, a year-on-year decrease of 20.80%; and realized net profit not attributable to the parent company was 16 million yuan, a year-on-year decrease of 42.95%.
Among them, 2023Q2 achieved operating income of 566 million yuan, up 78.78% year on year and 47.92% month on month; realized net profit attributable to parent company was 24 million yuan, up 527.56% year on year, and 5718.19% month on month; achieved net profit of 21 million yuan after deducting non-attributable net profit of 210 million yuan, up 419.58% year on year, and 530.27% month on month.
New customers hedge against production and sales pressure from Japanese customers, and aluminum casting products are expected to expand. The customer structure was optimized, and the volume of new energy customers was hedged against the downward pressure of core customer sales. The output of Dongfeng Honda/GAC Honda, a core customer of 2023H1, was -33.0%/-13.6% year-on-year, Q2 core customer sales rebounded in 2023, and Dongfeng Honda/GAC Honda's production output was +8.7%/-0.6% month-on-month, driving a significant increase in the company's Q2 revenue. At this stage, the company's products are mainly fasteners and welding parts. The new integrated aluminum die-casting business has already introduced a 4000T fully automatic die-casting production line. Relevant samples have been tested, and production can be carried out in bulk after customer verification and approval. The equipment already added by the company meets current production capacity and order requirements for the next year.
The scale effect+cost reduction and efficiency increase were remarkable, and the profit center moved upward. 2023H1 gross margin was 13.57%, down 1.97 pct year on year, of which gross margin in 2023Q2 was 14.09%, up 3.17 pct year on year, and 1.27 pct over the previous year. This was mainly due to a recovery in production and sales for core customers and an increase in the company's capacity utilization rate. The cost rate decreased during the period. The 2023Q2 expense rate was -3.24%, of which the management cost rate/R&D expense ratio was -1.22%/-2.47%, mainly due to the scale effect of the increase in the company's revenue scale. New production capacity is gradually reached, and production of superimposed aluminum castings and the gradual release of new products can effectively distribute fixed costs to achieve scale effects. In the long-term dimension, the company's profit center is expected to rise further.
Profit forecast and investment rating: We maintained the company's revenue for 2023-2025 at 22.0/26.2/3.01 billion yuan, +20%/+19%/+15%, respectively, and net profit at 1.8/2.3/280 million yuan, +62%/+31%/+19% year-on-year, respectively. The corresponding PE was 27/21/17 times, maintaining the “buy” rating.
Risk warning: core customer sales fall short of expectations, new product development falls short of expectations