Spring Autumn Electronics: Rapid Development of AIPC, Incremental Revenue from Magnesium Alloy, 2024 Net Profit Expected to Increase by 554.29%-629.06% YoY

Jan 21, 2025 17:21

Source:SMM

Spring and Autumn Electronics announced on the evening of January 21 that, based on preliminary estimates by the financial department, the net profit attributable to the owners of the parent company for 2024 is expected to reach 175 million to 195 million yuan, an increase of 148.2533 million to 168.2533 million yuan compared to the same period last year (statutory disclosure data), up 554.29% to 629.06% YoY. 2. The net profit attributable to the owners of the parent company after deducting non-recurring gains and losses for 2024 is expected to reach 75 million to 95 million yuan, an increase of 55.2477 million to 75.2477 million yuan compared to the same period last year (statutory disclosure data), up 279.70% to 380.96% YoY.

On the evening of January 21, Spring Electronics announced that, based on preliminary estimates by the financial department, the net profit attributable to shareholders of the parent company for 2024 is expected to reach 175 million to 195 million yuan, an increase of 148.2533 million to 168.2533 million yuan compared to the same period last year (statutory disclosure data), up 554.29% to 629.06% YoY. 2. The net profit attributable to shareholders of the parent company, excluding non-recurring gains and losses, is expected to reach 75 million to 95 million yuan for 2024, an increase of 55.2477 million to 75.2477 million yuan compared to the same period last year (statutory disclosure data), up 279.70% to 380.96% YoY.

Spring Electronics explained the main reasons for the expected performance growth: In 2024, the recovery trend of the global laptop market is becoming increasingly clear, and AIPC is developing rapidly. Downstream laptop brands are launching a variety of AIPC products. Benefiting from the recovery of the laptop industry, the company's performance is gradually improving. Meanwhile, with the implementation of orders for magnesium alloy applications in NEVs, incremental revenue has been generated, creating a new profit growth point for the company. Additionally, to focus company resources on developing advantageous industries, reduce asset management risks, improve investment quality, enhance profitability, promote healthy development, and strengthen overall competitiveness, the company has undertaken a series of industrial restructuring measures. During the reporting period, the company transferred its equity in Nanchang Chunqin Precision Technology Co., Ltd. (formerly known as Nanchang Spring Electronics Technology Co., Ltd.), generating certain investment gains.

When asked, "Does Spring Electronics provide structural components for the Harmony Intelligent Mobility Alliance (HIMA) series of vehicles? If not, is there a plan to enter the supply chain for this system's car models?" Spring Electronics responded on the investor interaction platform on November 29, stating that the company has broad application scenarios in the magnesium alloy business for NEVs and will continue to expand its downstream customer base to promote the rapid development of its NEV business.

On December 2, Zhongyou Securities released a research report on Spring Electronics, noting: The PC business continues to grow rapidly. AIPC-related complete machines and chip products are being showcased on a large scale, and 2024 may become the "Year of AIPC," with AIPC expected to accelerate its penetration into the PC market. The company has established long-term stable partnerships with world-leading laptop brands such as Lenovo, Samsung Electronics, HP, Dell, and LG, as well as with tolling businesses like Wistron, Quanta, and Huaqin, which have sufficient capacity in the industry. Among them, the company's main customers for precision structural components for laptops include Lenovo, Samsung Electronics, HP, Dell, Huawei, and LG, and it has become a primary supplier for customers like Lenovo and Samsung Electronics. The company closely collaborates with major laptop brand customers such as Lenovo, Samsung, HP, Dell, and Huawei, continuously strengthening its relationships with downstream customers by participating in the R&D process of their new products. Magnesium Alloy for EVs Opens a Second Growth Curve. Magnesium alloy, with its excellent corrosion resistance, castability, mechanical strength, being the lightest practical alloy, good machinability, high strength-to-density ratio, rigidity, high thermal conductivity, outstanding casting performance, optimal shock absorption, and excellent processability, has become the best choice for lightweighting in NEVs. The company has years of manufacturing experience and technical expertise in magnesium alloy applications. Through semi-solid injection molding technology, it has quickly entered the NEV parts supply chain via in-car screens, supporting applications in NEV central control systems, steering systems, and electronic control systems. Risk warnings: Intensified industry competition; material price volatility; weaker-than-expected downstream demand; underperformance in product R&D.

From Spring Electronics' 2024 annual performance forecast, it can be seen that the implementation of orders for magnesium alloy applications in NEVs has generated incremental revenue, creating a new profit growth point for the company. Reviewing the performance of the magnesium industry chain in 2024, it is evident that the pressure on magnesium prices has impacted the performance of many magnesium ingot smelting industries. However, with the stable trend of magnesium alloy prices, downstream demand for magnesium alloys has gradually recovered.

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Affected by the weak trend in raw material prices, magnesium prices in 2024 continued to decline. Taking the price of 90# magnesium ingots in the main production area of Fugu as an example, the year-end price of 16,000 yuan/mt was down significantly from the early-year price of 20,250 yuan/mt, with a decline of 21%. The sharp drop in magnesium prices has caused unprecedented cost pressure on magnesium ingot smelters, drastically compressing profit margins and making operations difficult for most smelters.

However, in the magnesium alloy market: In recent years, due to high and volatile magnesium prices, both production and export volumes of magnesium alloys have been significantly impacted. Particularly for domestic die-casting companies, the lack of pricing power and the sharp fluctuations in raw material prices have severely compressed profits, forcing some small and medium-sized factories to cut or halt production due to cost pressures, and magnesium alloy projects were shelved. The expansion of downstream applications for magnesium alloys was severely hindered. However, as magnesium prices gradually stabilized in 2024, the cost-performance ratio of magnesium alloys improved significantly, and downstream demand for magnesium alloys gradually recovered. Market acceptance of magnesium alloys increased, and some factories began scheduling production for export orders. According to SMM statistics, China's total magnesium alloy production in 2024 reached 354,000 mt, up 14.2% YoY. It is reported that dozens of automotive magnesium alloy components have been developed in the market, including steering wheel frames and dashboard brackets. Among them, magnesium alloy steering wheel frames have been applied in over 80% of vehicles, and large magnesium alloy components such as dashboard brackets, central control brackets, display screen brackets, and air conditioning brackets are increasingly used in high-end brand vehicles. Therefore, the promotion of magnesium alloy applications in NEVs will significantly boost market demand for magnesium alloys.

In the long term, there are still many uncertainties in the domestic magnesium market. Supply side: Due to the high concentration of capacity in China's magnesium industry, production is greatly influenced by policies. How to balance policy coordination with self-development remains a challenge. Demand side: Currently, it is a critical period for the promotion and application of magnesium alloys. Price instability is extremely unfavorable for promotion, and the market urgently needs a solution to stabilize magnesium prices. SMM expects that due to policy uncertainties and the immature pricing mechanism in the magnesium market, balancing green economy development with the healthy development of the industry will remain a key topic for the magnesium market in 2025.

Spring Autumn Electronics: Rapid Development of AIPC, Incremental Revenue from Magnesium Alloy, 2024 Net Profit Expected to Increase by 554.29%-629.06% YoY

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