Investment events
The company expects to achieve net profit of 398 million yuan to 420 million yuan in 2023, an increase of 55.12% to 63.69% over the previous year; net profit after deducting non-return to mother of 378 million yuan to 400 million yuan, an increase of 58.15% to 67.36% year on year.
Key points of investment
Strong results for the fourth quarter of 2023
According to the company's performance forecast, the fourth quarter of 2023 is expected to achieve a net profit center of 132 million yuan, an increase of 48.31% year on year and 21.10% month on month. We believe this is mainly due to the boom in downstream demand. The company followed the customer to achieve volume; the scale effect gradually became apparent, and profitability increased.
There are many new targets added in 2023. The announced projects have already exceeded 33 billion yuan. According to the company's announcement, the total number of targeted projects added by the company from January to April 2023 is about 149-151 billion yuan, with a period of 1-7 years; the total number of targeted projects added by the company in May-April is 131-13.4 billion yuan. Projects with a period of 1-8 years are expected to be 109-111 billion yuan, and projects with a period of 10-12 years are expected to be 2.23 billion yuan. The total number of new orders received by the company in the first half of 2023 is about 28.5 billion yuan. In addition, the company received multiple project targets from customers in October-December 2023, with an estimated total of 4.9-50 billion yuan, of which projects with a cycle of 1-5 years are expected to be 45-4.6 billion yuan, and projects with a cycle of 6-10 years are expected to be 400 million yuan. As a result, the number of new fixed points added in the first, second, and fourth quarters has exceeded 33 billion yuan.
The acceleration of overseas layout is expected to benefit from overseas NEV market demand. On the one hand, the company's Mexican factory has now provided supporting products to many well-known car seat companies to indirectly supply related parts products to T customers. Future target strategic customers include T customers, GM, Mercedes-Benz, BMW, Brose, etc.; on the other hand, the company is actively expanding overseas markets through the export of molds and components.
Profit forecasting and valuation
The profit forecast was lowered and the “buy” rating was maintained. The company's customers cover mainstream companies for new energy vehicles, optical storage inverters, and power batteries, and are full of orders on hand, which is expected to support rapid growth in performance. Considering the decline in market demand growth in the new energy industry in recent years, we carefully lowered the company's net profit to mother in 2023-2025 to 417 million, 659 million yuan, and 847 million yuan (506 million, 814 million yuan, and 1.70 billion yuan respectively before the reduction), corresponding EPS was 2.34, 3.69, and 4.75 yuan/share, and the current stock price corresponding to PE is 16, 10, and 8 times. Maintain a “buy” rating.
Risk warning
Downstream demand fell short of expectations, order confirmation fell short of expectations, and market competition intensified.