Performance differentiation in the automotive parts industry: Nearly 80% of companies see net profit growth, with a significant trend towards internationalization

August 09, 2024

As of April 22, among the 113 A-share automotive parts listed companies that have disclosed their annual reports for 2023, nearly 80% of the companies have achieved a year-on-year increase in net profit. Among them, 16 companies including Weifu High tech, Bojun Technology, and Kehua Holdings have achieved a year-on-year increase in net profit of over 100%, demonstrating strong growth momentum in the industry.

Industry experts point out that companies that achieve high performance growth are mainly concentrated in the fields of automotive parts matching, electronic appliances, rubber products, engine components, etc. The market demand in these fields continues to grow, with rapid technological updates and high product added value, bringing high profits to the company.

In terms of net profit growth rate, Weifu High tech, ST Baling, and Kehua Holdings ranked among the top three, with growth rates of 1446.28%, 680.46%, and 530.94%, respectively. In addition, companies such as Zhejiang Shibao, Wan'an Technology, Soling Co., Ltd., Yingboer, and Feilong Co., Ltd. have also achieved net profit growth exceeding double digits.

Several companies mentioned in their annual reports the reasons for performance changes such as order growth, sales growth, and export growth. Weifu High tech stated that its four cylinder turbocharger products have reached a historic high in sales, while the sales of motor shaft products have increased by nearly 1.5 times year-on-year, and overseas markets have also maintained growth. Kehua Holdings and Feilong Co., Ltd. also mentioned that the demand from domestic and foreign customers has steadily increased, with sales volume increasing compared to the same period last year, and benefiting from the growth of new energy thermal management products and the synchronous growth of export markets.

Industry analysts believe that these companies have strong research and development capabilities and technological advantages in the field of automotive parts, and can improve profitability through optimizing production processes, reducing costs, and other means. Meanwhile, with the transformation and upgrading of the global automotive industry, the export demand for automotive parts is also continuously increasing, opening up new growth opportunities for the company.

However, not all companies have achieved good performance. Among 113 listed companies, 9 companies incurred losses last year. These companies are mainly concentrated in the traditional automotive parts field, affected by multiple factors such as shrinking market demand, fierce competition, and the lack of economies of scale.

Despite the existence of performance differentiation, the internationalization trend of the automotive parts industry is becoming increasingly significant. According to customs data compiled by the China Association of Automobile Manufacturers, the export value of automobile spare parts in China reached 87.7 billion US dollars in 2023, a year-on-year increase of 9%. Several companies such as Feilong, Qingdao Shuangxing, and General Motors are accelerating their overseas expansion by building overseas factories and improving their global production capacity layout to further expand their overseas markets.

Industry experts point out that the expansion of overseas markets by relevant companies is an important manifestation of implementing globalization strategies, which can help create new growth points, enhance technological level and management capabilities. With the transformation and upgrading of the global automotive industry and the increasing requirements for environmental protection, safety, intelligence, etc., the future prosperity of the automotive parts industry is expected to continue to improve, and the trend of enterprise internationalization will also be irreversible.

Author:

Mr. yin chang

E-mail:

yinchanghaoshuai@163.com