2023 revenue increased 16.30% year over year, with steady revenue growth
The company released its 2023 annual report, with revenue of 4.678 billion yuan, +16.30% year-on-year; net profit to mother was -217 million yuan, and net profit after deducting non-return to mother was -284 million yuan, all of which turned into a year-on-year loss. Due to intense competition in vehicle prices, the company's performance is under pressure in the short term. Based on this, we lowered 2024-2025 and added the 2026 profit forecast. Net profit for 2024-2026 is 0.09/1.85/407 million yuan, respectively (the original value for 2024-2025 was 3.70/520 million yuan), the corresponding EPS is 0.08/1.54/3.40 yuan/share, respectively. The current stock price corresponding to 2024-2026 is 18.8 times PE, respectively. The company has increased R&D investment in intelligent driving, new energy, chassis control and other businesses. Performance recovery can be expected, and the “buy” rating is maintained.
2024Q1 gross margin reached 24.68%, improving month-on-month
The company achieved revenue of 889 million yuan in 2024Q1, an increase of 20.35% over the previous year; net profit to mother was -192 million yuan, net profit after deducting non-return to mother was -220 million yuan. The year-on-year growth rate of 2024Q1 revenue picked up compared to 2023Q1. The company's gross margin in the first quarter was 24.68%, -1.75pct year over year, +2.10pct month-on-month, and gross margin increased significantly. On the cost side, the management cost rate/sales cost rate/R&D expense ratio were 9.83%/8.80%/32.66%, respectively, -0.17pct/+1.89pct/+4.87pct. The company actively improved product updates and technical reserves, and the R&D cost rate increased significantly.
Two-wheel drive for domestic and overseas markets, dedicated to full coverage of vehicle electronic control products. The company follows the trend of automobile electric intelligence and the rapid evolution of EE architectures to central computing, and actively lays out domestic and foreign markets. Domestic market: (1) In terms of distributed domain control units, the company's AR-HUD based on the DLP scheme has been targeted by Geely and SAIC Maxus, and some projects have been mass-produced and shipped; self-developed 4D millimeter wave radar has been applied to the overall solution business for high-level intelligent driving; (2) domain control products, the development of urban NOA functions is progressing smoothly; the domestic chassis domain controller market space is broad. At the same time, the company's full-stack self-developed chassis domain controller is suitable for the next generation of electronic and electrical architectures. It is already equipped with a variety of models, which can achieve functions such as welcoming guests, active prediction, and magic carpet. Preempt Domestic market share. Overseas markets: The company is actively exploring the international market and has been designated for various OEM/Tier 1 products such as Stellantis and Scania. At the same time, a wholly-owned subsidiary in Malaysia has been built and put into operation, and overseas business is progressing rapidly.
Risk warning: Downstream demand falls short of expectations, market competition is fierce, and product development progress falls short of expectations.