HASCO(SH:600741) Soochow Securities·2024-05-01 00:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported its Q1 2024 results, which were slightly below expectations, with total revenue of 37 billion yuan, reflecting a quarter-on-quarter increase of 0.6% but a year-on-year decrease of 21.3%. The net profit attributable to shareholders was 1.263 billion yuan, down 11.9% quarter-on-quarter and 49.0% year-on-year [3] - The company is diversifying its customer base and actively seeking new clients, with significant growth in production from external clients such as Tesla, BYD, and Chery in Q1 2024, showing year-on-year increases of 2%, 8%, and 69% respectively. However, production from SAIC's brands showed mixed results, impacting overall revenue [3] - Continuous cost reduction and efficiency improvements are being implemented, with a Q1 2024 gross margin of 12.5%, slightly down from previous periods due to pressure from downstream automakers. The company is expected to maintain stable profitability through diversified customer structures and refined cost management [3] - The company's operating cash flow has significantly improved, with a net cash flow of 1.224 billion yuan in Q1 2024, up 117% year-on-year, primarily due to increased cash receipts from sales. The company has ample cash on hand, with monetary funds amounting to 41.5 billion yuan [3] Financial Forecasts and Valuation - The revenue forecasts for 2024-2026 are maintained at 180.5 billion yuan, 195.8 billion yuan, and 204.6 billion yuan, representing year-on-year growth of 7.1%, 8.5%, and 4.5% respectively. The net profit forecasts for the same period have been adjusted to 7.8 billion yuan, 8.3 billion yuan, and 8.8 billion yuan, with corresponding P/E ratios of 7, 6, and 6 times [4] - The company’s Q1 2024 net profit margin was 3.41%, reflecting a decrease compared to previous periods, but the overall profitability is expected to remain stable due to ongoing strategic initiatives [3][4]