Incident: The company released its annual report for '23 and its quarterly report for '24. In 2023, the company's revenue was 24.6 billion yuan, +15% year on year; net profit to mother was 2.9 billion yuan, +14% year on year; gross sales margin was 27.9%, and net sales profit margin was 12.0%. 2024Q1, the company's revenue was 6.4 billion yuan, +13% year over year; net profit to mother was 600 million yuan, +8% year on year; gross sales margin was 27.1%, and net sales profit margin was 10.0%.
The leading position in thermal management is stable, and the basic market business grows in line with rising downstream demand. In 2023, in terms of business, 1) Refrigeration and air conditioning electrical components: revenue of 14.6 billion yuan, +6% year-on-year, mainly due to a recovery in industry demand and a steady increase in the company's domestic and foreign market share. According to Industry Online, in 2023, China's household air conditioner production was 170 million units, +11% year over year; 2) Gas-Zero: Revenue of 9.9 billion yuan, +32% year-on-year, mainly due to improved downstream demand. 2024Q1, the company's revenue was +13% year over year and +15% month over month. The main driving force was strong demand in the home appliance industry. According to AVC PSI, domestic sales of air conditioners reached 22.659 million units, an increase of 14.5% over the previous year.
Due to forward losses, the company's 2024Q1 net interest rate was briefly disturbed. 2024Q1, the company's gross sales margin was +1.5PCT year-on-year, and -2.2PCT month-on-month, mainly due to increases in raw material prices, shipping costs, etc.; net sales margin was -0.7PCT year over year, and -3.2PCT month-on-month, including the company's futures revenue of 4.78 million yuan, forward loss of 57.73 million yuan, and exchange gain of 16.46 million yuan. On the cost side, 2024Q1, the company's sales/management/finance/R&D expense rates were 2%/7%/-0.4%/5%, respectively, compared to -2/-0.2/+3PCT. Among them, R&D expenses increased a lot, mainly due to investment in new businesses such as robots.
Energy storage was listed as the leading customer support+robot began to build production bases to drive future performance growth.
The company has the highest market share in the world for automotive electronic expansion valves, thermal management integrated components for new energy vehicles, and Omega pumps. 1) Energy storage: According to the National Energy Administration, the installed scale of new energy storage in China by 2025 must reach at least 30 GW, which is about 10 times the current scale. At present, the company's energy storage business has been listed as the leading customer support, laying the foundation for subsequent business development. 2) Robotics: Combined with leading companies in the robotics industry, the company's technology research and development and product progress are at the forefront of the industry. Currently, it is actively planning the overseas production layout of mechatronic actuators. In 2024, the company announced that it plans to invest in the construction of a robotic mechatronic actuator and domain controller R&D and production base project, with a total planned investment of not less than 3.8 billion yuan.
Profit forecast and valuation: The company's net profit for 24-26 is estimated to be 36/43.49 billion yuan, respectively, and the corresponding PE is 24/20/17 times, respectively, maintaining a “buy” rating.
Risk warning: Downstream sales fall short of expectations, industry competition intensifies, and customer development falls short of expectations.