China International Capital Corporation (CICC) has released a report maintaining Yongda Auto's (03669, Financial) 2025 net profit forecast and introducing a 2026 net profit forecast of 462 million RMB. The current stock price suggests a price-to-earnings (P/E) ratio of 13.4x for 2025 and 10.1x for 2026. CICC has raised the target price by 29.9% to HKD 3.00, corresponding to a 15.0x P/E for 2025 and 11.4x for 2026. The 2024 performance aligns with CICC's expectations.
In 2024, Yongda Auto's revenue reached 63.42 billion RMB, down 14.64% year-on-year, while net profit was 201 million RMB, a 64.94% decrease. The new energy vehicle (NEV) segment showed resilience with a 23.4% increase in sales to 11,085 units, driven by high-value models. This pushed NEV revenue up by 84.63% to 3.018 billion RMB, accounting for 6.52% of total revenue.
Despite competitive pricing pressure affecting gross margins, the high-margin maintenance business remained robust. Gross margin fell to 8.32%, but the maintenance business maintained over 40% margins. Cost controls improved, with efficiency gains from closing underperforming stores and digital tools.
Yongda Auto declared a total dividend of 240 million RMB for 2024, with a payout ratio of 120%. The company plans to increase NEV sales to 50% by 2026, enhancing its long-term competitiveness through strategic innovations.
