CHANGAN AUTOMOBILE-B(000625) 东方证券·2024-11-12 00:07Investment Rating - The report maintains a Buy rating for the company with a target price of 19.2 CNY [3] Core Views - Q3 Performance: The company's Q3 revenue was 34.237 billion CNY, a 19.8% YoY decline and a 13.8% QoQ decline. Net profit attributable to shareholders was 748 million CNY, down 66.4% YoY and 55.3% QoQ. The decline was mainly due to reduced investment income and increased R&D expenses, which rose 12.8% QoQ to 1.544 billion CNY [1] - Gross Margin Improvement: Q3 gross margin improved to 15.7%, up 2.5 percentage points QoQ, despite a 1.3 percentage point YoY decline after adjustments. The adjusted gross margin for the first three quarters was 14.4%, down 2.2 percentage points YoY [1] - Investment Income Pressure: Q3 investment income was -268 million CNY, a 672 million CNY YoY decline and 441 million CNY QoQ decline. The weak performance of joint ventures and Avita Technology contributed to this pressure [1] - Avita's Potential: Avita's new model, the Avita 07, received 25,386 pre-orders within 17 days of launch, with a peak of 3,508 orders in a single day. The company expects Avita's sales to recover in Q4, driven by new model launches [1] - Self-owned Brand Performance: Q3 self-owned brand sales were 338,900 units, down 17.4% YoY, but new energy vehicle sales increased 13.7% YoY to 148,600 units. The company expects Q4 sales to improve with new model launches [1] Financial Forecasts - 2024-2026 Profit Forecast: The report revised down the net profit forecast for 2024-2026 to 5.948 billion CNY, 8.269 billion CNY, and 10.126 billion CNY, respectively, from previous estimates of 7.869 billion CNY, 10.302 billion CNY, and 11.673 billion CNY [2] - Revenue Growth: Revenue is expected to grow 15.5% YoY in 2024, 11.1% YoY in 2025, and 9.6% YoY in 2026, reaching 174.823 billion CNY, 194.292 billion CNY, and 213.009 billion CNY, respectively [2] - Profit Margins: Gross margin is forecasted to be 16.1% in 2024, 17.3% in 2025, and 18.0% in 2026, while net margin is expected to be 3.4%, 4.3%, and 4.8%, respectively [2] Valuation and Peer Comparison - Valuation: The company's 2024E PE ratio is 25.9x, compared to an industry average of 32x. The target price is set at 19.2 CNY, implying a 23.5% upside from the current price of 15.55 CNY [3][8] - Peer Comparison: The company's 2024E PE ratio is lower than peers like Guangzhou Automobile Group (40.31x) and Jianghuai Automobile (231.82x), but higher than Great Wall Motor (19.11x) and SAIC Motor (13.84x) [8] Key Drivers for Future Growth - Avita's New Models: The launch of Avita 07 and upcoming Avita 11/12 models are expected to drive sales recovery in Q4 [1] - Self-owned Brand Expansion: New models like Deep Blue L07, S05, and Changan Qiyuan E07 are expected to boost sales and profitability in Q4 [1] - R&D Investment: Increased R&D expenses indicate the company's focus on innovation and new product development, which could drive long-term growth [1]