Event: the company releases its quarterly report of 2024Wptchampionship1Q24 achieved revenue of 24%Wptchampionship.100 million yuan (+ 25.5%), realizing net profit of 240 million yuan (+ 19.2%) and deducting non-return net profit of 230 million yuan (+ 34.6%). First-quarter results are under pressure, and gross profit margin continues to decline. 1Q24 realized operating income of 2.41 billion yuan (+ 25.5%), net profit of 240 million yuan (+ 19.2%) and non-return net profit of 230 million yuan (+ 34.6%). In terms of profit margin, the company's 1Q24 gross profit margin was 19.6%, down 1.9pct from the same period last year and 0.8pct from the previous year. The company's gross profit margin is mainly affected by the price of raw materials, coupled with the fact that the company is in the stage of product structure optimization, which makes the gross profit margin of the company's car lamp business unstable; the company's net profit margin is 10.1%, down 1.9pct from the same period last year and 0.6pct from the previous year. In terms of expense rate, the sales expense rate is 1.5% (+ 0.8pct), the management expense rate is 2.6% (- 0.9pct), the R & D expense rate is 5.8% (- 0.6pct), and the financial expense rate is 0.3% (+ 0.3pct). Quality projects + quality customers empower the future development of the company. (1) Project: in 2023, the company undertook the new product research and development project of 58 models and realized the mass production of 50 models. The high-quality new project provides a strong guarantee for the future development of the company. (2) customers: the company's long-term development has a solid customer base, and in recent years, the company's customer structure is being continuously optimized, which is expected to benefit from the release of new models from new customers downstream. The company's main customers include German Volkswagen, FAW-Volkswagen, SAIC-Volkswagen, Daimler, Beijing Mercedes-Benz, German BMW, brilliance BMW, General Motors, SAIC GM, Japan Toyota, FAW Toyota, Guangzhou Automobile Honda, Dongfeng Honda, FAW Red Flag, Geely Automobile, Chery Automobile There are many domestic and foreign automobile manufacturing enterprises, such as ideal Automobile, Ulay Automobile, Xiaopeng Automobile, Cyrus and some international well-known new energy vehicle company. We will improve the global layout and actively expand overseas markets. In 2023, the company's main business in overseas markets achieved revenue of 330 million yuan (+ 157.3%), gross profit margin of 26.1% (+ 10.1pct), and increased revenue share in overseas markets. Serbian Xingyu gradually released its production capacity and worked with the headquarters to undertake customer globalization projects, laying a good foundation for the company to expand overseas markets. In addition, the company is registered to establish Mexico Xingyu and American Xingyu to further improve the overseas layout. Firmly grasp the trends of the industry and strengthen the development and application of new technologies. Over the past 23 years, the company has continuously strengthened its R & D investment, and its R & D directions mainly include: DLP intelligent headlights based on DMD technology, HD intelligent headlights based on MicroLED technology, pixel display interactive lights based on MicroLED/MiniLED technology, innovative research and development of intelligent digital grille / digital bumper, development of car light controller HCM/RCM/LCU, R & D of automotive electronics related products, etc. It is helpful for the company to seize the market opportunity of electrification, intelligence and domestic substitution of China's automobile industry, win more high-quality customers and projects, and further optimize and upgrade the customer structure and product structure. It is expected that in the future, the company will benefit from the upgrading opportunities of LED, ADB, HD-ADB and DLP headlights brought about by smart driving upgrades, and with the improvement of headlamp technology and more personalized design, it will help to increase the added value of products, thus increasing the value of bicycles, and will further enhance the company's profitability. Maintain the "highly recommended" investment rating. As the company continued to strengthen the capacity layout of new products and gradually began mass production of on-hand orders, for the smooth development of high-quality customers, the Serbian factory began to contribute overseas revenue, and the company's 24-26 net return profit is expected to be RMB 1.48 billion, respectively, maintaining the "highly recommended" investment rating. Risk tips: the risk of fluctuations in the automotive industry; the risk of technology research and development and product development; the risk of high customer concentration; the risk of gross profit margin decline, etc. [disclaimer] this article only represents the views of a third party and does not represent the position of Hexun. Investors operate accordingly, at their own risk.

[disclaimer] this article only represents the views of a third party and does not represent the position of Hexun. Investors operate accordingly, at their own risk.