Xinquan Automotive Trim(603179) 长江证券·2024-05-20 08:32Investment Rating - The report maintains a "Buy" rating for Xinquan Co Ltd (603179 SH) [8] Core Views - Xinquan achieved strong growth in Q1 2024 with revenue of 3 05 billion yuan up 40 24% YoY though down 6 34% QoQ Net profit attributable to parent company reached 204 million yuan up 34 74% YoY but down 16 52% QoQ [2][5] - The company's globalization strategy is progressing smoothly with overseas expansion in Mexico Slovakia and the US [6] - Xinquan is transitioning into a global interior and exterior platform leader with significant long-term growth potential [7] Financial Performance Revenue and Profit - Q1 2024 revenue: 3 05 billion yuan (+40 24% YoY -6 34% QoQ) [2][5] - Q1 2024 net profit: 204 million yuan (+34 74% YoY -16 52% QoQ) [2][5] - Gross margin: 20 10% (+0 3pct YoY -0 68pct QoQ) [6] - Net profit margin: 6 7% (-0 27pct YoY -0 82pct QoQ) [6] Key Financial Ratios - Sales expense ratio: 1 71% (-0 2pct YoY +0 6pct QoQ) [6] - Management expense ratio: 5 47% (+0 7pct YoY +1 2pct QoQ) [6] - R&D expense ratio: 4 63% (-0 3pct YoY +0 1pct QoQ) [6] Business Development Customer Performance - Key customer growth rates in Q1 2024: - Model Y: -11 87% YoY -19 10% QoQ [6] - Model 3: +5 24% QoQ [6] - Geely: +47 97% YoY -10 19% QoQ [6] - Chery (excluding Jaguar Land Rover): +67 81% YoY -14 10% QoQ [6] - Li Auto: +52 90% YoY -39 00% QoQ [6] - BYD: +13 96% YoY -33 76% QoQ [6] Overseas Expansion - Mexico factory: Achieved 336 million yuan revenue in 2023 with capacity ramp-up continuing in Q1 2024 [6] - Slovakia: Additional investment of 45 million euros [6] - US expansion: 50 million USD investment in Delaware holding company with subsequent investments of 4 million USD and 46 million USD in Texas operations [6] Future Outlook - Expected net profit for 2024-2026: 1 133 billion 1 566 billion and 1 801 billion yuan respectively [7] - Corresponding PE ratios: 20X 14X and 12X [7] - The company is expanding into exterior parts and seat components with potential for further extension in these areas [7] - Xinquan is positioned to become a global leader in automotive interior and exterior platforms with significant long-term growth potential [7]