Incident: The company released its 2023 performance report. In 2023, the company achieved operating income of 3,913 billion yuan, net profit to mother of 497 million yuan, +11.05% year over year, of which 23Q4 achieved operating income of 1,166 million yuan, +20.95% year over year, +15.22% month on month, net profit of 110 million yuan, -16.03% year on month, and -20.86% month on month. Overall performance was in line with expectations.
The share of new energy customers has increased, and large customers are driving up scale: Currently, the company has sufficient orders, supporting many new energy models such as Tesla Model 3, Model Y, Ideal L series, NIO ES6, EC6, and Zero Sports T03. The overall share of new energy customers in 2023 is over 70%, an increase of about 10 pcts over 2022. The 23Q4 company achieved revenue of 1,166 billion yuan, +20.95% year over year and +15.22% month on month. The top two major customers, Tesla and Ideal Auto, achieved sales volume of 248,700 units/131,800 units, +9.17%/+184.56% year over year, and +11.76%/+25.41% month-on-month. The volume of major customer models is expected to drive the company's revenue growth in 2024.
Q4 gross margin is under pressure, and net profit is in line with the month-on-month growth: in 2023, the company's gross margin was 23.21%, -1.32pct year on year, 23Q4 was 20.57%, +6.89pct year on year, and -3.12pct month-on-month. We expect to be mainly affected by rising raw material prices and NEV market price competition; the total sales, management/R&D cost ratio in 2023 was 6.18%, -0.22pct, 23Q4 total 4.37%, -3.82pct, and -2.54 pct month-on-month, mainly affected by This is due to a decrease in the share of R&D investment. In 2023, the company achieved net profit of 497 million yuan, +11.05% year-on-year, of which Q4 achieved net profit of 110 million yuan, -16.03% year-on-year and -20.86% month-on-month. The 23Q4 company received other income such as government subsidies (+022 million), asset impairment losses (-024 million) due to clients' product-specific fixed asset impairment preparations, and credit impairment losses (-048 million) due to clients' bad debt provisions. If these factors were excluded, net profit attributable to mother was +13.48% YoY and +15.94% month-on-month. The year-on-year change in net profit was slightly lower than revenue performance, in line with revenue growth from month to month.
Integrated die casting accelerates layout, new product development helps expand: In terms of integrated die casting, the company has now set up four integrated die-casting production lines in Yancheng Duoli and Anhui Daya. Among them, Yancheng Doli's 6100-ton integrated die-casting production line has been put into use, and the 9200-ton integrated die-casting production line is still in the installation stage. At the same time, it is planned to continue to lay out integrated die-casting production lines in the Jiangsu Jintan Economic Development Zone. It is expected that the revenue scale of the company's integrated die-casting business will gradually be released in 2025. In terms of new products, the company actively lays out businesses such as composites and thermoforming. It has now obtained a certain business target. It is expected that it will accelerate the improvement of the business layout in the future, and continue to benefit from the lightweight and integrated die-casting circuit Beta Dongfeng.
Profit forecast: The company is expected to achieve revenue of 49.85, 62.88, and 7.663 billion yuan in 2024-2026, and net profit to mother of 661, 8.52, and 1,058 billion yuan, giving it a “recommended” rating.
Risk warning: New energy vehicle sales fall short of expectations, raw material prices fluctuate, integrated die-casting business progress falls short of expectations, etc.