The Zhitong Finance App learned that Anxin International released a research report stating that maintaining the “buy” rating of Regent International (00842), the net profit to the mother is expected to be 652/840 million yuan in 2024/2025, corresponding EPS is 0.48 and 0.62 yuan/share, and the target price is HK$1.82. The company is a powerful lead-acid battery manufacturer with a global production capacity. Backup batteries provide new development opportunities for the company's basic disk business, rapid growth in data center scale, and transformation and upgrading of the communications industry. The automotive start/stop battery sector is fueling growth with Dongfeng, a global new energy source. It also actively lays out energy storage business to promote diversified product development.
Anxin International's main views are as follows:
The Chinese market and the starter battery sector performed strongly.
Backup batteries are the company's basic plate, and starter batteries are growing at an accelerated pace. The company's backup battery business achieved revenue of 6.284 billion yuan, an increase of 4.6% over the previous year. Starter batteries performed well, achieving revenue of 3.687 billion yuan, an increase of 28.9% over the previous year. Power batteries achieved revenue of 1,209 billion yuan, a year-on-year decrease of 3.9%. The lead recycling business saw a decrease in sales due to some internal use. In terms of starter batteries, the company is actively expanding overseas business, developing new customers in Italy, Dubai, and the UAE, and increasing the number of old customers. Overseas sales revenue reached 950 million yuan (last year: 480 million yuan). In addition, the company is also actively expanding the replacement market. The company also acquired Tianjin Jieshi and Shunde Yuasa last year to further expand production capacity and brand resources. The company's revenue in China reached 8.157 billion yuan in '23, an increase of 8% over the previous year. However, overseas business growth slowed down last year.
Factories are located overseas, and production capacity has increased.
The company set up a factory in Mexico and built a new battery assembly plant in Mexico last year, which is expected to be put into operation within a few months. Another battery manufacturing plant in Mexico is also being planned and is scheduled to be put into trial operation in the second quarter of 2025. Additionally, the company plans to establish a new starter battery manufacturing plant in Malaysia, which is expected to be tested by the end of 2024 or the beginning of 2025.
Gross profit margins have rebounded, and dividend ratios are attractive.
Gross margin reached 14.4% in '23, an increase of 2 percentage points. The main reason is the control of manufacturing costs and the drastic reduction in product transportation costs. The company proposes a dividend of HK7 cents per share at the end of the period and 11 HK cents for the whole year. The dividend rate at the current stock price is 8% (at current price), which is quite attractive.