Desay SV(002920)2025-03-21 02:53Summary of Desay SV (002920.SZ) Conference Call Company Overview - Company: Desay SV - Ticker: 002920.SZ - Industry: Automotive technology, focusing on AI, smart driving, and smart cockpit solutions Key Points Financial Performance - 4Q24 Results: - Net income increased by 2% YoY but missed estimates by 29% and 20% compared to Goldman Sachs and Bloomberg consensus respectively [1] - Revenue growth slowed to 16% YoY in 4Q24, down from 27% YoY in 3Q24, leading to a total revenue growth of +26% YoY for 2024 [7] - Gross margin (GM) declined to 18.4% in 4Q24 from 20.9% in 3Q24, attributed to accounting adjustments, foreign exchange impacts, and accrued liabilities [1][7] - Operating expenses improved to 9.5% of revenue, better than consensus estimates [7] Revenue Growth Outlook - 2025 Revenue Growth: Expected to be solid at +38% YoY, driven by the rise of smart EVs in China and advancements in generative AI [1] - Smart Cockpit Revenue Guidance: New orders annualized revenue guidance is over Rmb16 billion for FY2025, up from Rmb15 billion in early 2024 [2] - Smart Driving Revenue Guidance: New orders annualized revenue guidance is close to Rmb10 billion for FY2025, up from Rmb8 billion in early 2024 [3] Product Development - Smart Cockpit: - Gen-4 smart cockpit is in mass production, with Gen-5 launched based on AI chipsets for real-time decision-making [2] - First Head-Up Display (HUD) has started mass production, penetrating markets in Japan and Germany [2] - Smart Driving: - High-end smart driving domain controller (IPU04) received new orders from various car OEMs [3] - Collaboration with Chery to develop a central computing platform integrating smart cockpit and smart driving domains [3] Market Expansion - Overseas Expansion: - Construction of a smart factory in Spain to support European market expansion [7] - New foreign OEM customers include Honda, TATA Motors, VW, and others [7] Competitive Landscape - Gross Margin Outlook: Expected to stabilize at 20% from 2025 to 2027, despite competitive pressures [1] - Market Position: Desay SV maintains a leading market position, with a product mix upgrade expected to offset modest automotive market growth in China [10] Valuation and Investment Outlook - Target Price: Maintained at Rmb137, with a Neutral rating due to fair valuation [17] - Risks: Include competition among Chinese car OEMs, product line expansion speed, and development of automotive software and services [18] Financial Metrics - 2024 Revenue: Rmb27.6 billion, with a gross profit of Rmb5.49 billion and a net income of Rmb2.005 billion [12] - 2025 Estimates: Revenue expected to reach Rmb38.1 billion, with net income projected at Rmb3.028 billion [12] Conclusion Desay SV is positioned for growth driven by advancements in smart driving and cockpit technologies, alongside strategic market expansions. However, competitive pressures and market dynamics in China pose risks to its financial performance and margins.