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Duoli Technology (001311): The gradual improvement of mass industry performance with new projects is worth looking forward to

GUOTAI HAITONG SEC ·  Apr 22

Introduction to this report:

The company released its 2024 annual report, and net profit decreased year-on-year. The company's performance is expected to continue to improve as downstream customer sales increase and integrated die-casting and thermoforming businesses expand.

Key investment points:

Maintain the target price of $28.45 and maintain the holdings increase rating. The 2025/2026 EPS forecast was lowered to 2.39 (-0.24)/2.80 (-0.32)/2.80 (-0.32) yuan, and the 2027 EPS forecast was added at 3.18 yuan, taking into account factors such as the fact that downstream vehicle competition is still fierce, and the 2027 EPS forecast is 3.18 yuan. Referring to the comparable company, the company was given 10.16 times PE in 2026 (slightly lower than the average of comparable companies, 11.76 times), maintaining the target price of 28.45 yuan.

Due to factors such as fluctuations in sales volume from downstream customers, the company's net profit in 2024 decreased year-on-year.

In 2024, the company achieved revenue of 3.592 billion yuan, -8.19% year on year, and realized net profit of 0.425 billion yuan to mother, -14.43% year on year. Both operating income and net profit decreased year on year. The company's main customers include automakers such as Tesla, SAIC Volkswagen, and SAIC-GM. In 2024, Tesla's wholesale sales volume in China was -3.3% YoY, SAIC-Volkswagen -5.5% YoY, and SAIC-GM -56.5% YoY. Fluctuations in production and sales of some downstream customers had an adverse impact on the company's revenue and profits. In addition, in 2024, the company added 55.47 million yuan of various impairment provisions, including 26.89 million yuan of credit impairment provisions and 28.57 million yuan of accrued inventory price reduction reserves, which also had a certain impact on the decline in current profits.

The new project will gradually be put into operation, and the capacity utilization rate is expected to increase. The company's integrated die-casting and thermoforming businesses will gradually be put into production, which is expected to increase capacity utilization and profits. According to the company's announcement on February 10, 2025, the wholly-owned subsidiaries Kunshan Daya and Shanghai Dolly have received multiple project targets, including integrated die-casting parts projects for 2 leading NEV manufacturers, and multiple thermoformed parts projects for 6 automobile manufacturers and 1 parts company. Mass production of the above projects will begin in 2025 and 2026, with a total sales amount of about 1.3-1.5 billion yuan for three years after mass production. According to the announcement of April 16, 2025, the production capacity of the company's pre-built integrated die-casting and thermoforming production line will be greatly increased in 2026.

The number of new energy customers increased, and the share of revenue increased. According to the company's announcement on April 16, 2025, the company provides support for LEAPMOTOR C series models. Based on the passenger federation's wholesale sales calculation, the annual sales volume of the Zero Sports C series model 2024 was +112% year-on-year, and the Q1 sales volume in 2025 was +183% year-on-year, achieving rapid release. According to the company's 2024 annual report, NEV customers accounted for more than 75% of revenue in 2024, up from 2023 (70%). As the company's NEV customer sales volume continues to grow, the customer structure is expected to be further optimized.

Risk warning: downstream customer sales fall short of expectations, and the intensification of price wars in the automotive industry affects profits

The translation is provided by third-party software.


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