The company discloses its 2023 annual report. In 2023, we achieved revenue of 24.56 billion yuan (YoY +15.0%), net profit of 2.92 billion yuan (YoY +13.5%), net profit of 2.92 billion yuan (YoY +27.3%), gross profit margin of 27.9% (YoY+1.8pct), and net profit margin of 11.9% (YoY-0.2pct). 23Q4 achieved revenue of 5.58 billion yuan (YoY -2.9%), net profit of 760 million yuan (YoY -19.5%), net profit of 690 million yuan (YoY +28.7%), gross profit margin of 29.2% (YoY+0.6pct), and net profit margin of 13.6% (YoY-2.8pct).

Revenue grew steadily, and profits from the main business continued to rise. On the revenue side, revenue from the cold distribution and auto zero business in 2023 was +6% and +32%, respectively, continuing the steady growth trend; on the profit side, gross margins of cold distribution and zero auto in 2023 were +2.0pct and +1.5pct, respectively, which is expected to mainly come from product structure optimization. Looking at 23Q4 alone, net profit to mother declined a lot. Mainly in 22Q4, there was an asset disposal income of about 450 million yuan, which actually grew well after deducting non-caliber.

The company disclosed its 2024 quarterly report. 24Q1 achieved revenue of 6.44 billion yuan (YoY +13.4%), net profit of 650 million yuan (YoY +7.7%), net profit margin of 27.1% (YoY+1.5pct), gross profit margin of 27.1% (YoY+1.5pct), 10.1% (YoY 0.5pct), sales/management/R&D/finance expense ratio of -0.2 pct/-0.2pct/-1.2pct year-on-year. Revenue growth is slowing, which is expected to be mainly affected by low expectations from major North American customers. Net interest rate declined year-on-year, and is expected to be mainly affected by foreign exchange forward losses (24Q1 loss of 57.73 million yuan, 23Q1 income of 18.44 million yuan) and credit impairment losses (24Q1 loss of 48.57 million yuan, 23Q1 loss of 12.37 million yuan), after deducting good non-caliber growth.

Profit forecast and investment advice: Net profit due to mother is expected to be +22%, +23%, and +24%, respectively. Referring to comparable company valuations, considering the company's outstanding quality among peers and broad prospects for the auto zero business, the 24-year award is 25 xPE, corresponding to a reasonable value of 23.79 yuan/share, maintaining a “buy” rating.

Risk warning: Industry sentiment is declining; raw materials are rising; NEV growth falls short of expectations.