Key points of investment
The company achieved operating income of 360 million yuan in 24Q1, +24.88% year over year; net profit to mother of 7.6908 million yuan, -6.25% year over year; net profit after deducting non-return to mother of 6.7956 million yuan, -5.42% year on year.
Strong growth in traditional and emerging sectors built 24Q1 revenue, with 24Q1's revenue growth in traditional advantage areas such as refrigeration, HVAC, power and electricity. Customer orders in electronics, new energy vehicles and other fields continued to increase, and revenue from emerging racetracks increased. Together, the company's 24Q1 revenue reached 360 million yuan, +24.88% over the same period last year. As the company actively expands new tracks and overseas markets, and the subsequent implementation of additional production capacity, the company's overall revenue is expected to continue to grow rapidly in the future.
Depreciation accruals increased during the new production capacity climbing period, and profit growth was under pressure in the short term. I am optimistic that future profitability will increase as the company's fund-raising projects begin to be put into operation one after another, and depreciation accruals will increase accordingly. At the same time, the company's sales expenses rate and R&D expenses rate have increased year-on-year. As a result, the company's profit growth has been pressured in the short term. 24Q1 company's net interest rate to mother was 2.13%, -0.71 pct year on year. With the operation of information systems such as SAP and MES in 2024, the company will improve the efficiency of internal management decisions, refine staffing, and implement lean production, a series of measures to improve quality and efficiency are expected to drive the company's future profitability.
Profit forecasting and valuation
The overall revenue for 2024-2026 is expected to be 1,825/22.71/2,741 billion yuan, respectively, with corresponding growth rates of 28.97%/24.44%/20.71%, and net profit to mother of 0.66/0.93/128 million yuan, respectively. The corresponding growth rates are 58.20%/40.87%/38.06%, respectively, and the corresponding EPS is 0.74/1.04/1.43 yuan, respectively. Maintain a “buy” rating.
Risk warning
Downstream demand on new racetracks such as new energy vehicles and electronics falls short of expectations; production capacity climbing progress falls short of expectations; and there is a risk of fluctuating raw material prices.