NJEC(600699) -·2024-11-14 07:53Summary of Junsheng Electronics Conference Call Company Overview - Junsheng Electronics reported a revenue of approximately 41.1 billion yuan for the first three quarters of 2024, maintaining relative stability. The automotive electronics segment generated about 12.7 billion yuan, while the automotive safety segment achieved approximately 28.4 billion yuan [2][3]. Financial Performance - The company's gross margin was 15.6%, an increase of about 1.6 percentage points year-on-year. The gross margin for the automotive safety segment was 14.0%, up 2.6 percentage points year-on-year. The automotive electronics segment's gross margin was 19.2%, but it declined due to the reclassification of warranty expenses to operating costs. Excluding this impact, the gross margin for automotive electronics exceeded 20% [2][4]. - The net profit attributable to shareholders was approximately 941 million yuan, a year-on-year increase of 20.9%. The net profit excluding non-recurring items was also 941 million yuan, reflecting a growth of 40.3% year-on-year [2][4]. Market Dynamics - Global light vehicle sales for the first three quarters of 2024 were approximately 63.77 million units, with China's non-export sales increasing by 0.4% year-on-year. However, major markets showed mixed performance: China's non-export and Europe saw declines of 2.7% and 4.6% respectively; the U.S. market grew by only 0.8%; Japan and South Korea experienced declines of over 8% [2][5]. - Despite a downturn in the global automotive market, Junsheng Electronics maintained steady progress in its various businesses due to prior adjustments in customer structure [5]. Cost Control Measures - The company has implemented continuous optimization of existing product processes, capacity transfer, employee structure optimization, and supply chain management to stabilize raw material and logistics costs, thereby enhancing product cost competitiveness. Additionally, measures such as converting dollar loans to yuan and switching from floating to fixed-rate loans helped control financial expenses, with a slight increase in exchange gains during the first three quarters [2][6]. New Order Developments - Junsheng Electronics secured new orders with a total lifecycle value of approximately 70.4 billion yuan in the first three quarters, with automotive safety orders amounting to 49.1 billion yuan, surpassing the total for 2023. The automotive electronics segment received orders worth 21.4 billion yuan. Orders related to new energy vehicles totaled 37.6 billion yuan, accounting for over 50% of the total. Domestic new orders amounted to 31 billion yuan, representing 44% of the total [2][7]. Cash Flow Situation - The company maintained a healthy growth trend in operating net cash flow, primarily due to stable revenue and enhanced working capital management, particularly in accounts receivable. Although fixed asset investments increased due to order growth, the overall outflow of investment net cash flow was controlled. Cash payments for fixed assets, intangible assets, and other long-term assets decreased. Additionally, the increase in financing cash inflow was mainly due to funds received from strategic investors and optimized debt structure [2][8]. Future Development Strategy - Junsheng Electronics plans to capitalize on the increasing penetration of smart electric vehicles and the rising market share of domestic brands and new car manufacturers in China. The company aims to intensify its efforts in the Chinese market, particularly with leading domestic brands and new energy vehicle manufacturers [2][9]. - In terms of technological innovation, the focus will be on breakthroughs in smart driving, smart cockpits, connectivity, and vehicle body intelligence to secure more new technologies and orders, which are expected to become new growth points [2][10].