The profit side of the automobile industry recovered significantly year-on-year in the first quarter of 2024; the profitability performance of automakers was divided, commercial vehicles improved overall, and the profitability of parts companies increased year-on-year.
The Zhitong Finance App learned that Orient Securities released a research report saying that the vehicle industry's revenue for the first quarter of 2024 was 2.25 trillion yuan, up 5.0% year on year; total profit was 103.95 billion yuan, up 26.9% year on year. In 2023, passenger car companies' profits were divided, and commercial vehicle companies' profits picked up overall; in the first quarter of '24, passenger car companies' overall profit levels were under pressure, and commercial vehicle companies improved markedly; most parts companies' profits improved year-on-year in the first quarter of 2023 and 2024. It is expected that under fierce price competition, leading NEV companies will continue to expand their market share with their leading edge in new energy technology and the industry chain. Vehicle and parts companies with strong competitiveness in NEVs are worth paying attention to. It is recommended to continue to pay attention to some automotive and Huawei industrial chains, T-chains, Xiaomi industrial chains, heavy truck industry chains, and state-owned enterprises with undervalued/high dividend ratios.
The main views of Orient Securities are as follows:
The profit side of the industry recovered significantly year-on-year in the first quarter of 2024
In 2023, the vehicle industry (including listed and unlisted companies) had revenue of 1.01 trillion yuan, up 8.7% year on year; total profit was 508.63 billion yuan, down 4.4% year on year. The vehicle industry's revenue for the first quarter of 2024 was 2.25 trillion yuan, up 5.0% year on year; total profit was 103.95 billion yuan, up 26.9% year on year. In 2023, passenger car companies' profits were divided, and commercial vehicle companies' profits picked up overall; in the first quarter, passenger car companies' overall profit levels were under pressure, and commercial vehicle companies improved markedly; most parts companies' profits improved year-on-year in 2023 and the first quarter of 2024.
The profitability performance of automakers in the first quarter of 2024 was divided, the overall improvement of commercial vehicles, and the profitability of parts companies increased year-on-year
In 2023, the ROE of the automotive industry (data caliber is SW automobile) increased 1.9 percentage points year on year, and the ROE of the vehicle industry decreased 0.3 percentage points year on year in the first quarter of 2024; in 2023, the ROE of the parts industry (data caliber is SW auto parts III) increased 1.6 percentage points year on year, and the ROE of the parts industry increased 0.4 percentage points year on year in the first quarter of 2024. The overall gross margin of commercial vehicle companies improved significantly year-on-year in 2023. The gross margin performance of passenger car and bus companies was divided in the first quarter of 2024, and the overall gross margin of truck companies picked up year-on-year; the gross margin of most parts companies increased year-on-year in 2023 and the first quarter of 2024.
Inventory: Passenger car turnaround days increased at the end of the first quarter, and commercial vehicles and parts improved
At the end of the first quarter of 2024, inventory of vehicles (the data caliber is SW Motors) accounted for 19.7% of current assets, a year-on-year decrease of 0.4 percentage points and an increase of 0.8 percentage points over the previous year. Inventory in the parts industry (SW Auto Parts III) accounts for 21.9% of current assets, a year-on-year decrease of 1.5 percentage points and a month-on-month increase of 0.2 percentage points. This is expected to be due to increased vehicle sales combined with optimization of supply chain management and lower raw material costs in the automotive industry. At the end of the first quarter, passenger car companies' turnover days increased, truck turnover decreased slightly, bus turnover improved markedly, and some parts companies' inventory turnover days decreased.
Cash flow: The industry's cash flow was divided in the first quarter, and buses increased significantly year-on-year
Operating cash flow for vehicles and parts improved dramatically in 2023, and industry cash flow began to diverge in the first quarter of 2024. The net cash flow from operating activities in the automotive industry in the first quarter (data caliber is SW Auto) was 6.511 billion yuan, an increase of 6.158 billion yuan over the previous year. Net cash flow from operating activities accounted for 9.2% of gross profit. The cash flow situation of passenger car and truck companies has all been internally fragmented, and the cash flow of bus companies has improved dramatically.
The auto parts industry (data caliber is SW Auto Parts III) had net cash flow of 7.552 billion yuan in the first quarter, up 61.9% year on year; net cash flow from operating activities accounted for 14.2% of gross profit. Cash flow from operating activities in the parts industry was divided in the first quarter, and cash flow control for Aikodi, Precision Forging Technology, Hexing Co., Ltd., Xusheng shares, and Fuyao Glass was better controlled. Passenger car and parts companies' accounts receivable increased year-on-year in the first quarter, which is expected to be mainly due to increased competition in the industry and the transfer of some pressure from downstream automakers to parts companies.
It is recommended to focus on:
Changan Automobile (000625.SZ), BYD (002594.SZ), JAC (600418.SH), Sinotruk (000951.SZ), SAIC Motor Group (600104.SH); Xinquan (603179.SH), Yinlun (002126.SZ), Daimei (), Ruihu Mold (002997.SZ), iKodi (), Baolong Technology (System), 603730.SH 600933.SH 601689.SH 603197.SH Fengmao Co., Ltd. (301459.SZ), Molding Technology (000700.SZ), Xusheng Group (603305.SH), Sanhua Intelligent Control (002050.SZ), Shangsheng Electronics (688533.SH), Huayu Auto (600741.SH), Best (300580.SZ), Bethel (), Precision Forging Technology (300258.SZ), Desai Xiwei (002920.SZ), Huayang Group (002906.SZ), double ring drive (002472.SZ), double ring drive (002472.SZ), 603596.SH Jifeng Co., Ltd. (603997.SH), Shanghai Yanpu (605128.SH), Fuyao Glass (600660.SH), Weichai Power (000338.SZ), etc.
Risk warning
The macroeconomic downturn affects automobile demand, the impact of fluctuations in upstream raw material prices, and the price war pressure on car companies.