According to recent research reports from several agencies, as the price war continues to heat up competition this year, Cyrus surpassed expectations by handing over such a report card.
On April 29, Cyrus (601127.SH) released its 2024 quarterly report and 2023 annual report. Based on the AITO Questionnaire series, which continued to improve market performance and multiple initiatives such as cost reduction and efficiency, and technological innovation, Cyrus ushered in net revenue growth in the first quarter of this year: revenue of 26.561 billion yuan in the first quarter, an increase of 421.76% over the previous year; net profit attributable to shareholders of listed companies was 220 million yuan, and gross margin increased to 21.5%.
According to recent research reports from several agencies, as the price war continues to heat up competition this year, Cyrus surpassed expectations by handing over such a report card. Everbright Securities pointed out that exceeding expectations in the first quarter mainly benefited from the improvement in gross margin driven by large-scale delivery and the decline in the period expense ratio. It is expected that the company's performance will improve quarterly and raise the company's “buy” rating. Fangzheng Securities said that with the three models selling well and rising prices, the upward channel is expected to be released at an accelerated pace, and recommended ratings will be given.
The gross margin for the first quarter reached 21%, far exceeding the industry average
Why was Cyrus able to improve its net profit in the first quarter when the industry was extremely involved? The strong growth of the NEV business is certainly a key factor. In the first quarter of this year, Cyrus sold 94,825 new energy vehicles, an increase of 374.77% over the previous year. Benefiting from increased sales of new energy vehicles, the net cash flow from operating activities in the first quarter of 2024 was 1,187 billion yuan.
It is worth mentioning that Cyrus's gross margin improved sharply by 21.5% in the first quarter. This gross margin level has already surpassed the average of about 10% of the Chinese automobile industry, and far exceeds that of most NEV companies. Under the wave of price cuts brought about by the price war, Tesla's gross margin continued to fall to 17.4% in the first quarter of this year, while Cyrus ushered in a higher gross margin level, reflecting the company's strong product strength and competitiveness.
The Quanjie series of high-end new energy vehicles has increased its share of total sales, driving continuous improvement in performance. The effects of scaling up have already been initially evident. Among them, AITO asked that the new M7 and M9 are popular models currently on the market. According to the data, AITO has accumulated more than 174,000 vehicles in the seven months since the launch of the new M7, and the cumulative total of more than 70,000 vehicles in the three months since the launch of the Quanjie M9. It takes time from big deal to delivery. The dividends brought about by hot sales were concentrated in the first quarter, and Cyrus's high growth is gradually being verified.
Technology R&D drives innovation to continuously enhance the company's competitive advantage
Behind the rapid development of Cyrus is the continuous deepening of the innovative model of cross-border integration between the company and Huawei, as well as the implementation of innovative practices brought about by continuous high-intensity R&D investment.
In terms of the innovative model, AITO Quanjie, which has cooperated between the two parties, has achieved “phenomenal” growth, ranking among the top five luxury brand sales in the Chinese market in the first quarter, becoming the highest-ranked Chinese brand in the list. At the same time, Cyrus, which has a gene for open cooperation, is also continuously deepening cooperation with partners and ecological partners such as the Ningde Era and Bosch to actively build a symbiotic and win-win automotive ecosystem where everything is connected.
On the technical side, in 2023, Celis invested 4.438 billion yuan in R&D, accounting for 12.38% of revenue; there were nearly 5,000 R&D personnel, an increase of 18.6% over the previous year. As a company dedicated to becoming a technology-based automobile company, real money investment is transformed into productivity, further enhancing the company's competitive advantage. It is reflected in the industry's previous forward-looking layout in range extension technology. In 2024, it achieved the highest range extender load capacity in the industry, and has reached cooperation with 12 industry partners; at the Beijing Auto Show on April 25, many core technical achievements such as the Celis Rubik's Cube platform, a next-generation all-in-one super range extender assembly, a high-integrated electric drive 7-in-1 assembly, and the AITO Wanjie M9 integrated die-cast body were unveiled.
It's easy to imagine that, due to multiple factors, Cyrus, which had a weak track record, finally ushered in the first quarter. Along with the increase in sales, products, and technology in all dimensions, Cyrus's room for imagination will be further opened up. According to the latest research report of Everbright Securities, as a pioneer in the smart selection cooperation model, it has a first-mover advantage, and the pace of production capacity climbing has accelerated. In addition to the impact of the model cycle, the key trend of cooperative models is also highly related to the depth of cooperation between the two parties and production capacity delivery. Considering economies of scale, the company's performance is expected to improve quarterly, raising the company's “buy” rating and the 2024 net profit forecast.