WBTL(603596) Southwest Securities·2024-05-06 01:33Investment Rating - The report maintains a "Buy" rating for the company [1][4]. Core Views - The company reported Q1 2024 revenue of 1.86 billion yuan, a year-on-year increase of 24%, but a quarter-on-quarter decrease of 21.5%. The net profit attributable to the parent company was 210 million yuan, up 21.9% year-on-year but down 29.2% quarter-on-quarter [3]. - The company's gross margin was under pressure in Q1 2024, with a gross margin of 20.8%, down 0.7 percentage points year-on-year and 2.2 percentage points quarter-on-quarter. The net profit margin was 11.3%, down 0.4 percentage points year-on-year and 1.5 percentage points quarter-on-quarter. However, it is expected that gross margins will stabilize and recover as new projects ramp up and capacity utilization improves [3]. - The company is expanding its lightweight production capacity, with the first phase of a project in Mexico producing 4 million lightweight components annually, which commenced production at the end of Q3 2023. The second phase is expected to start production by the end of 2024. Additionally, the company has added 106 new projects in Q1 2024, including a lightweight project for a North American new energy vehicle company, projected to generate approximately 1.22 billion USD in total sales over five years [3]. - The company has accelerated its layout in the automotive steer-by-wire sector, with significant progress in the development of various steering systems. The sales volume of mechanical steering products increased by 54% year-on-year in Q1 2024 [3]. Summary by Sections Financial Performance - Q1 2024 revenue: 1.86 billion yuan, +24% YoY, -21.5% QoQ - Q1 2024 net profit: 210 million yuan, +21.9% YoY, -29.2% QoQ - Q1 2024 gross margin: 20.8%, -0.7pp YoY, -2.2pp QoQ - Q1 2024 net profit margin: 11.3%, -0.4pp YoY, -1.5pp QoQ [3][4]. Growth Projections - Expected EPS for 2024-2026: 2.61, 3.34, 4.21 yuan, with corresponding PE ratios of 22, 17, and 14 times. The CAGR for net profit attributable to the parent company is projected at 26.9% [4][5]. Capacity Expansion - The company is expanding its lightweight production capacity, with significant projects in Mexico and domestic production bases. The first phase in Mexico has commenced production, and the second phase is on track for late 2024 [3]. - New projects include a lightweight project for a North American new energy vehicle company and a platform project for a German joint venture, with significant projected sales [3]. Strategic Developments - The company has made strides in the steer-by-wire sector, with a focus on integrating control systems for various automotive applications. The sales of mechanical steering products have seen substantial growth [3].