Automotive parts company Changhua Group has once again secured orders related to new energy vehicles. On the evening of September 11th, Changhua Group (605018) announced that the company received a designated notice from domestic car manufacturers for new energy vehicle new model stamping and welding parts, totaling 33 projects with a life cycle of 5 years and a total sales amount of approximately 320 million yuan, expected to gradually begin mass production in the first quarter of 2026.
The announcement indicates that the designated products will be produced by the wholly-owned subsidiary, Guangdong Changhua Automobile Parts Co., Ltd. The designated project will not have a significant impact on the company's operating performance for the current year, but it will be beneficial for increasing the operating income and benefits in future years.
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Established in 1993 and listed on the main board of the Shanghai Stock Exchange in 2020, Changhua Group is a company specializing in automotive parts. The company is mainly engaged in the research and development, production, and sales of automotive metal structural parts, starting with fasteners and later forming a main product structure of "fasteners + stamping and welding parts + large aluminum castings" for automotive parts, widely used in the fields of new energy and fuel passenger cars. In recent years, Changhua Group has continued to deepen its field expansion, explore new application scenarios for products, and its fastener products have been successfully applied in the fields of photovoltaic energy storage and carbon ceramic brake systems.
It is understood that Changhua Group has established a stable new energy business cooperation relationship with nearly 30 car manufacturers and has achieved mass production and supply, among which 5 are among the top ten in sales of new car manufacturers in 2023, and 7 are among the top ten in new energy vehicle sales among traditional car manufacturers in 2023.
Benefiting from the rapid growth of new energy vehicle business, Changhua Group achieved a total operating income of 1.155 billion yuan in the first half of 2024, a year-on-year increase of 21.67%; it achieved a net profit attributable to the parent company of 61.9358 million yuan, a year-on-year increase of 158.02%. Regarding the reasons for the performance growth, Changhua Group stated that the development of the passenger car industry was stable and improving in the first half of the year, and the company increased its market development and new product promotion efforts in the early stage, with many new projects gradually achieving mass production, especially the new energy vehicle business growing rapidly, driving the company's performance to grow rapidly in the first half of the year.
The semi-annual report shows that in the first half of 2024, Changhua Group's new energy vehicle parts sales revenue was 191 million yuan, a year-on-year increase of 110.91%; the sales revenue of products commonly used by fuel vehicles and new energy vehicles was approximately 296 million yuan, a year-on-year increase of 65.52%.
In order to continue to develop the new energy vehicle parts market, Changhua Group announced a private placement fundraising project in 2021, planning to raise a total amount of funds not exceeding 760 million yuan, to be used for the construction of an annual production of 2 billion pieces of automotive high-strength fasteners production line project (Phase I), automotive stamping and welding parts (Guangqing Industrial Park) production base construction project (Phase I), and lightweight automotive aluminum parts intelligent production base project and other three major projects. At that time, Changhua Group stated that the project's production would expand the company's production capacity of lightweight large aluminum castings, stamping and welding parts, and high-strength fasteners, which would be beneficial for expanding the company's business scale and optimizing the product structure.
At present, the projects laid out by Changhua Group are progressing smoothly. The investor research record disclosed by the company in June this year shows that the "Automotive Stamping and Welding Parts (Guangqing Industrial Park) Production Base Construction Project (Phase I)" officially entered the production stage and achieved mass production and supply in October 2023, ahead of the expected target of achieving production by the end of 2023. The production of this project will improve Changhua Group's order delivery capability to the Pearl River Delta automotive industry customer base, further enhance the manufacturing capability of automotive stamping and welding parts, and further increase the business growth rate of stamping and welding parts.
The "Lightweight Automotive Aluminum Parts Intelligent Production Base Project" has currently built a 4,000-ton die-casting machine and ancillary equipment, and the production line has been fully connected, producing samples.
Looking forward to 2024, Changhua Group has set an annual revenue target of 2.7 to 3 billion yuan, and stated that the growth will mainly come from five aspects: first, the continuous volume increase of the IPO fundraising projects; second, the production and volume increase of the refinancing projects; third, the continuous strengthening of cooperation with new energy customers; fourth, breakthroughs in new fields such as photovoltaic and energy storage, with the continuous expansion of the customer base, bringing new growth points, the company has more than 200 types of fastener products that have been designated; fifth, the carbon ceramic brake disc metal parts suite is expected to increase in volume in the second half of the year, exploring a new blue ocean market.