Incident: The company released its 2025 quarterly report. In 2025Q1, it achieved revenue of 0.873 billion yuan, +11.82%/-20.99%, and realized net profit to mother of 0.095 billion yuan, -17.10%/+14.56% year-on-month, and realized net profit without deduction of 0.091 billion yuan, or -17.42%/+50.04% year-on-month, respectively.
Profitability was under pressure, and net interest rates declined year over year. The gross margin of the 2025Q1 company was 20.91%, -2.24pp/+2.16pp, respectively, and the net margin was 10.92%, and -3.75pp/+3.44pp, month-on-month, respectively. The decrease in net interest rate was mainly due to an increase in expenses during the period. 2025Q1's sales/management/finance/R&D expenses ratio was 0.39%/3.81%/-0.27%/2.61%, respectively, +0.06pp/+0.04pp/+0.02pp/+0.37pp compared to the same period.
Actively expand emerging businesses and diversify the product structure. The company continues to optimize its business layout, actively expand emerging business fields such as integrated die-casting, thermoforming, electrophoretic paint and composite materials on the basis of developing traditional stamping and welding services, and continues to invest in R&D to enhance technology development capabilities in response to the trend of automobile electrification and weight reduction. By laying out new businesses, developing new products, and developing new customers, the supporting value of bicycles was increased in 2024, and market competitiveness was enhanced. As the company's product structure continues to diversify, the value of bicycle support is expected to increase further.
The regional layout has been optimized, and the integrated die-casting business is about to begin. The company adopted the strategy of establishing production bases closely in line with the automobile industry cluster, and has successively implemented supporting sites in Anting, Shanghai, Kunshan, Anhui, Yantai, Shandong, Ningbo, Zhejiang, Changsha, Hunan, Changzhou, Jiangsu, Lingang, Jiangsu, Yancheng, Anhui, and Jinhua, Zhejiang. The company's perfect and good regional layout is conducive to receiving timely feedback from OEMs and responding quickly to requirements to ensure the timeliness of delivery and the stability of product quality. In 2024, the company added an integrated die-casting business production line in Changzhou, Jiangsu, and the project is still under construction. The company's integrated die-casting business is expected to gradually enter a large-scale mass production period starting in the second half of 2025 after production line investment and business development, and the scale effect is expected to gradually increase.
Profit forecasting and investment advice. The company's 2025-2027 EPS is expected to be 2.08/2.38/2.71 yuan, corresponding PE is 13/11/10 times, and the compound annual growth rate of net profit to mother will reach 15.12% in the next three years. The company was given 16 times PE in 2025, with a target price of 33.28 yuan, maintaining a “buy” rating.
Risk warning: automotive industry policy risk; market competition and business substitution risk; risk of downstream customer sales falling short of expectations; risk of raw material price fluctuations, etc.
