Incident: The company released its 2024 quarterly report. Q1 achieved revenue of 780 million yuan, -5.5%/-33%, net profit to mother of 115 million yuan, +7.8%/+4.8% year-on-month, net profit of 110 million yuan after deducting non-return to mother net profit of 110 million yuan, +9.2%/+6.8% year-on-month.
Profitability improved year-on-month in 1Q24, and Tesla & NIO & SAIC Motor dragged down revenue growth. According to Marklines, 1Q24's main downstream customers Tesla China/Ideal, NIO, Zero Sport/SAIC Motor achieved sales of 22.1/8.0/3.0/3.3/813,000 units, respectively, -4%/+53%/+218%/-6%. In terms of profit, 1Q24 achieved gross margin/net profit margin of 23.2%/14.7%, +0.58/+1.77pcts year over year; in terms of expenses, 1Q24's sales/management/R&D/finance expenses ratio was 0.3%/3.8%/2.2%/-0.3%, respectively, -0.03/+1.12/-1.17/-0.78pcts. The increase in management expenses was mainly due to the commencement of operation of some of the company's production bases in this period.
The forward-looking layout integrates die-casting to accelerate the growth of white body assembly suppliers. At present, Yancheng Duoli 6100T and 9200T die-casting equipment has been officially put into operation, and the two 6100T die-casting machine equipment in Daya, Anhui are expected to be completed within the year. In September 2023, the company was newly designated as the leading domestic new energy OEM project to provide it with integrated die-cast floor parts. The project is expected to be mass-produced in 2025, with an estimated additional sales revenue of 21-23 billion yuan during the 3-5 year life cycle. At the beginning of this year, the company once again reached cooperation with Bühler Group to renew 4 9200T die-casting machine equipment. At present, the company's Changzhou Jintan auto parts and integrated chassis structural parts project has completed the underground engineering part. It is expected to enter the installation and commissioning production line in May, and trial production will begin in July.
The project will add 8 integrated die-casting production lines and 5 stamping and welding production lines. After delivery, it is estimated that the annual production capacity of integrated die-casting will be increased by 600,000 pieces, and the annual production capacity of stamped welding parts will be increased by 10 million pieces.
Investment suggestion: As a leader in domestic automotive stamping parts, the company's high-quality customer bonding+management continues to be optimized, and integrated die casting is expected to start new growth. The company's revenue is expected to be 47.5/61.6/7.48 billion yuan in 2024-2026, +21%/+30%/+22% year-on-year, and net profit to mother of 6.0/7.7/940 million yuan, +21%/+22% year-on-year, maintaining a “buy” rating.
Risk warning: Integrated die-casting business expansion falls short of expectations; downstream customer sales fall short of expectations; risk of fluctuations in raw material prices.
