Huayang Group: Automotive Electronics, Precision Die Casting, and Other Core Businesses Accelerate, Achieving Record High Net Profit in 2024

On March 31, Huayang Group's stock price continued its upward trend from the previous trading day, closing up 1.47% at 35.32 yuan per share. The 2024 annual report disclosed by Huayang Group on the evening of March 28 showed that the company achieved operating revenue of 10.158 billion yuan, up 42.33% YoY, and net profit of 651 million yuan, up 40.13% YoY, with basic earnings per share of 1.24 yuan. Huayang Group stated that in the face of intense competition and rapidly changing industry dynamics, the company focused on "orders and delivery" in 2024, driven by R&D innovation and cost competitiveness, achieving high growth in both operating revenue and net profit, with operating revenue exceeding 10 billion yuan and net profit reaching a new high. Key highlights are as follows: 1. Core Business Accelerated 2024 marked the first year of the company's "acceleration and leadership" strategy, with accelerated business performance growth and enhanced competitiveness across all business segments and products. During the reporting period, the company achieved operating revenue of 10.158 billion yuan, up 42.33% YoY, including 7.603 billion yuan from automotive electronics, up 57.55% YoY, and 2.065 billion yuan from precision die casting, up 24.39% YoY. Net profit attributable to shareholders of the publicly listed firm was 651 million yuan, up 40.13% YoY, and non-GAAP net profit was 632 million yuan, up 43.47% YoY. Automotive electronics business achieved high growth. During the reporting period, sales revenue from mass-produced products such as display screens, HUDs, in-car wireless charging, and in-car cameras increased significantly. New product lines such as cockpit domain controllers, precision motion mechanisms, digital acoustics, digital keys, and electronic rearview mirrors also saw rapid sales growth. The company's competitiveness in multiple product categories improved rapidly, with some product lines ranking among the industry leaders. During the reporting period, HUD product shipments exceeded 1 million units, in-car wireless charging product shipments surpassed 4 million units, and cockpit domain controller shipments exceeded 300,000 units. According to third-party statistics, the company's HUD and in-car wireless charging products ranked first in market share among domestic suppliers, while the market share of cockpit domain controllers, LCD instruments, and display screens improved rapidly. The customer structure continued to optimize, with a significant increase in the number of major customers and a balanced distribution among the top five customers without single dependency. During the reporting period, revenue from customers such as Geely, Chery, Seres, and BAIC grew significantly, while products for customers such as NIO, Li Auto, XPeng, Xiaomi, and Stellantis saw rapid volume increases. Precision die casting business continued to grow. During the reporting period, sales revenue from components related to automotive intelligence (such as LiDAR, central control screens, domain controllers, and HUDs), NEV electric drive systems, optical communication modules, and high-speed high-frequency automotive connectors increased significantly YoY. Revenue from major customers such as Bosch, BorgWarner, BYD, Faurecia, United Microelectronics, TE Connectivity, and Molex grew substantially. 2. Expanding Customer Base and Significant Order Breakthroughs In 2024, the company's automotive electronics business made significant progress with new energy vehicle automakers, joint ventures, and international automakers, securing breakthroughs with Volkswagen Group and SAIC Audi, and numerous new projects with Stellantis Group, XPeng, Li Auto, Xiaomi, NIO, Leap Motor, Hyundai-Kia Automotive Group, Changan Mazda, and Changan Ford. The company continued to secure new projects from customers such as Chery, Geely, Changan, Great Wall, Seres, and BAIC, further increasing the product categories supplied to these customers. Order values for major products such as cockpit domain controllers, HUDs, display screens, precision motion mechanisms, digital acoustics, digital keys, and electronic rearview mirrors increased significantly. In 2024, the company's precision die casting business continued to secure new projects from ZF, Bosch, BorgWarner, BYD, Schaeffler, United Microelectronics, Faurecia, Flex, TE Connectivity, Molex, and Amphenol, with new breakthroughs in aluminum alloy business with Valeo and Nidec. Order values for components such as NEV three electric systems, autonomous driving systems, optical communication modules, and high-speed high-frequency automotive connectors increased significantly. 3. New Breakthroughs in Product Technology The company continued to increase R&D investment, with R&D expenditure of 831 million yuan during the reporting period, up 28.94% YoY, accounting for 8.19% of operating revenue. (1) Automotive electronics technology iterated rapidly, with significant advantages in multifunctional integrated products. (2) Precision die casting technology applications made new progress, focusing on core technology areas such as mold design and manufacturing, fixture design and manufacturing, CNC machining, FA equipment technology, aluminum alloy, magnesium alloy, and zinc alloy processes. Standardization of medium and large-tonnage molds and semi-assembly product technology continued to enhance the development and manufacturing capabilities of key NEV components and semi-assembly technology. In aluminum alloy, applications of high-strength and high-toughness aluminum alloy material die casting, high-precision valve body processing, and friction welding technologies increased. In zinc alloy, the application of high-speed die casting machines accelerated, with breakthroughs in integrated die casting technology for automotive multi-connector thin tubes, and an increase in optical communication module and high-speed high-frequency automotive connector projects. Magnesium alloy injection molding technology mass production projects increased. 4. Accelerating Domestic and Overseas Layout, New Capacity Gradually Put into Operation To meet the rapid development needs of its core businesses, the company continued to expand capacity and layout overseas. The company's private placement projects are progressing as planned, with new factories for automotive electronics and precision die casting in Huizhou already operational. The company used its own funds to build a new precision die casting component production site in Changxing Development Zone, Zhejiang in 2024, achieving land purchase, construction, and operation within the same year, becoming a regulated enterprise. Huayang Tong established new subsidiaries in Chongqing and Shanghai in July 2024, and Huayang Multimedia established new subsidiaries in Wuhu and Xi'an in December 2024, enhancing local supporting and service capabilities. Subsidiaries were established in Thailand and Mexico to expand overseas. 5. Promoting Organizational Reform and Enhancing Management Capabilities Huayang Group's annual report showed that in 2024, the company's core business did not undergo significant changes. The company focused on automotive intelligence and lightweighting, aiming to become a leading domestic and international supplier of automotive electronics products and components. The R&D, production, and sales of its core businesses, automotive electronics and precision die casting, are carried out by its subsidiaries. Outlook for Future Development Regarding the company's development strategy, Huayang Group stated in its annual report that the company will actively seize national industrial policies, align with industry trends, focus on automotive electronics and precision die casting businesses, and strive to become a leading domestic and international supplier of automotive electronics products and components. In automotive electronics, the company will continue to expand its product line, enhance product advancement through iteration and innovation, and collaborate with customers and ecosystem partners to create smarter and more user-friendly travel experiences. In precision die casting, the company will focus on precision mold and process technologies, align with automotive lightweighting and intelligence trends, and develop competitive and reliable automotive component products and services. Regarding the 2025 business plan, Huayang Group stated that in 2025, the company will continue to enhance its "order, delivery, and risk prevention" capabilities and performance. With advanced technology and cost advantages as key supports, the company will increase R&D investment to enhance product advancement, deepen supply chain partnerships to improve cost competitiveness, and strengthen marketing reforms to ensure order acquisition capabilities. The company will expand international business, advance overseas operations, extend its business radius, and improve risk control mechanisms to ensure stable operations. It will enhance automation and intelligence levels to improve delivery performance and continue to refine incentive mechanisms. The company will firmly follow a path of high-quality sustainable development and strive for leadership. On March 30, Ping An Securities issued a research report, giving Huayang Group a "recommended" rating. The reasons for the rating include: 1) rapid growth in the automotive electronics business; 2) stable profitability in precision die casting and profit release in automotive electronics; 3) continuous optimization of the customer structure, expanding customer base, and rapid increase in orders for major products. Risk factors include: 1) increasingly intense market competition, which may lead to a decline in the company's technological innovation capabilities and market competitiveness; 2) lower-than-expected automotive consumption, which may lead to a decline in sales of downstream customers, directly impacting the company's performance; 3) slower-than-expected ramp-up of new capacity.