Guohai Securities·2024-03-31 16:00Investment Rating - The report assigns an "Accumulate" rating for GAC Group (601238) as part of its initial coverage [1][8] Core Views - GAC Group's total revenue for 2023 reached 129.706 billion yuan, reflecting a year-on-year increase of 17.62%. However, the net profit attributable to shareholders dropped by 45.08% to 4.429 billion yuan [3][4] - The report highlights that GAC's self-owned brand sales are on the rise, while joint venture brands are under pressure, awaiting transformation [1][5] - The company is expected to continue enhancing its product matrix with multiple new models planned for release in 2024, focusing on electric and hybrid vehicles [6][8] Summary by Sections Financial Performance - In Q4 2023, GAC Group reported total revenue of 31.524 billion yuan, with a year-on-year increase of 6.36% but a quarter-on-quarter decrease of 13.09%. The net profit attributable to shareholders was -0.82 billion yuan, a significant decline compared to previous quarters [4] - The company faced challenges due to the decline in fuel vehicle sales and intensified price competition in the automotive market, leading to a gross margin of 8.18% in Q4 2023, down 2.04 percentage points year-on-year [4][5] Joint Venture Performance - GAC Honda and GAC Toyota reported revenues of 93.53 billion yuan and 152.87 billion yuan respectively in 2023, with year-on-year declines of 18.8% and 6.5%. Their sales also fell by 13.7% and 5.5% respectively [5] - The report notes that joint venture brands are struggling with competitive pressures, resulting in decreased sales and profitability [5] Self-Owned Brand Development - GAC's self-owned brands achieved sales of 886,500 units in 2023, with GAC Passenger Cars selling 406,500 units, marking a year-on-year increase of 12.12%. GAC Aion saw a remarkable growth of 77.02% in sales [6][8] - The company is focusing on expanding its high-end product offerings and plans to launch several new models, including hybrid SUVs and electric vehicles, in 2024 [6][8] Earnings Forecast - The report forecasts GAC Group's revenue to grow to 155 billion yuan in 2024, with a net profit of 4.806 billion yuan, representing a 9% increase year-on-year. The earnings per share (EPS) is projected to be 0.46 yuan [6][8]