Wencan(SH:603348) Haitong Securities·2024-05-05 02:02Investment Rating - The investment rating for the company is "Outperform the Market" [2] Core Views - The company reported a revenue of 5.1 billion yuan in 2023, a year-on-year decrease of 2%, and a net profit attributable to shareholders of 50 million yuan, down 79% year-on-year. However, in Q1 2024, the company achieved a revenue of 1.48 billion yuan, a year-on-year increase of 16% and a quarter-on-quarter increase of 16%, with a net profit of 60 million yuan, representing a 23-fold year-on-year increase and an 84-fold quarter-on-quarter increase [5][6] - The company's profitability significantly improved in Q1 2024, with a net profit margin of 4.2%, up 4.0 percentage points year-on-year and 4.1 percentage points quarter-on-quarter. The gross profit margin was 16.6%, up 2.3 percentage points year-on-year and 0.8 percentage points quarter-on-quarter [6] - The company is a leader in large integrated structural components, having achieved mass production and delivery of large integrated body products since Q4 2022, with a yield rate exceeding 95% [7] Summary by Sections Financial Performance - In 2023, the company faced pressure on its performance due to intensified global competition among automakers, delays in product delivery from some factories, and increased costs. The net profit margin for 2023 was 1.0%, down 3.6 percentage points year-on-year, and the gross profit margin was 15.0%, down 3.5 percentage points year-on-year [5] - The company expects revenue to grow to 6.59 billion yuan in 2024, 8.42 billion yuan in 2025, and 10.067 billion yuan in 2026, with net profits projected at 389 million yuan, 573 million yuan, and 775 million yuan respectively [9][19] Market Position and Outlook - The company has secured multiple large integrated structural component projects with various automotive clients, with mass production expected to begin in the third or fourth quarter of 2024 [7] - The estimated reasonable value range for the company's stock is between 33.93 and 36.88 yuan, based on a PE ratio of 23-25 for 2024, indicating a favorable valuation compared to the average PS ratio of comparable companies [7][11]