OKE(SH:688308) Soochow Securities·2024-05-04 12:30Investment Rating - The investment rating for the company is "Accumulate" (maintained) [4] Core Views - The company's revenue for Q1 2024 was 264 million yuan, a year-on-year decrease of 7.03%, while the net profit attributable to the parent company was 30 million yuan, down 49.66% year-on-year. The decline in performance is attributed to a high revenue base in Q1 2023 and increased unit costs due to underutilization of hard tool capacity, along with rising period expenses. However, there are signs of demand recovery since March 2024, and with the launch of new products and further expansion into overseas markets, the company's performance is expected to rebound in 2024 [1][4] Financial Performance Summary - In Q1 2024, the company's gross profit margin was 25.09%, down 7.14 percentage points year-on-year, and the net profit margin was 11.31%, down 9.58 percentage points year-on-year. The decline in margins is primarily due to increased costs and rising expense ratios. The period expense ratio for Q1 2024 was 15.04%, up 5.98 percentage points year-on-year, with sales, management, R&D, and financial expense ratios increasing by 0.03, 1.63, 2.93, and 1.45 percentage points respectively [2] Order Wins and Market Expansion - The company recently won a significant order for a tool management service project for BMW crankshafts, showcasing its comprehensive package capabilities. This win is seen as a demonstration of the company's ability to enter the automotive sector, where high-end tool prices and profit margins are generally higher, which is expected to positively impact the company's performance [13] - The company has accelerated its overseas market expansion, achieving 140 million yuan in overseas sales in 2023, with 110 million yuan from CNC tool exports, representing 19.27% of CNC tool revenue. The company has increased its overseas brand agency and sales have rapidly improved across nearly 60 countries, with some overseas clients in Asia and Europe experiencing doubled growth [13]