Founder Motor (002196) released its 2023 annual report and 2024 first quarter report as scheduled. The financial report shows that the company achieved revenue of 2.496 billion yuan in 2023, a year-on-year increase of 7.09%; net profit attributable to the parent company was 100 million yuan, turning losses into profits year-on-year; non-net profit was -849,200 yuan, up 99.66% year-on-year. The first quarter report data this year showed that the net profit attributable to the parent company was a loss of 8.3383 million yuan, and the net profit in the same period last year was 8.172 million yuan, turning from profit to loss; operating income was 486 million yuan, a year-on-year increase of 9.11%.

In 2024, the company will continue to focus on the development of household appliance controllers and power tool controllers, while increasing the research and development and expansion of the automotive controller market.

The revenue scale has ranked first among A-shares in Lishui City for two consecutive years

Public information shows that Founder Motor is a foreign trade export company specializing in the production of power sources for sewing equipment. Founder Motor’s main products are sewing machine motors. Its industrial sewing machine motors and household sewing machine motors and other series of products are exported to many countries and regions including Europe, America, the Middle East, and Southeast Asia. The production and export volume of household sewing machine motors are both leading in the country.

The company is the only power equipment company in Lishui City, Zhejiang Province. In recent years, the company has continuously optimized its strategic layout, further consolidated its technological barriers and industry competitive advantages, increased research and development and expansion of the automotive controller market, and maintained an upward trend in revenue. As of now, there are 8 A-share companies in Lishui City. Since 2022, the company has ranked first in revenue scale among A-share companies in Lishui City for two consecutive years.

Smart controller business is outstanding, gross profit margin hits a record high

The financial report shows that the company’s gross profit margin will reach 15.81% in 2023, a record high in the past four years. In terms of products, the gross profit margin of automotive application products will be 11.83% in 2023, an increase of 4.3 percentage points from the previous year; the gross profit margin of smart controller products will exceed 20%, reaching 20.7%, an increase of 3.53 percentage points from the previous year, and the gross profit margin of smart controllers will reach a record high; the gross profit margin of sewing machine application products will be 12.68%.

Regarding the intelligent controller product business, the company stated that through a number of measures such as manufacturing process optimization, improvement of product technical solutions, and research and development and industrialization of new project products, its gross profit margin has been greatly improved and its performance targets have been achieved well.

The company said that although the European and American consumer markets were sluggish, domestic strategic customers such as Ecovacs, Tineco, Monster, and Wrigley had strong demand, and the company’s intelligent controller business as a whole still maintained a good growth trend, with operating income increasing by 12.05% year-on-year. At the same time, the company has significantly improved its gross profit margin and achieved its performance goals through many measures such as manufacturing process optimization, product technology solution improvement, and new project product research and development and industrialization.

In the future, the company will form three major intelligent controller production bases in East China, South China, and overseas (Vietnam) to further expand production capacity and optimize capacity layout.

Micro motor and engine controller business has passed the most sluggish period

The company said that traditional household sewing machine motors have gradually returned to normal levels, and the power tool motors newly invested in recent years have begun to increase in volume and generate profits. The company’s power tool motor business has entered the supply chain of international customers such as TTI, Black & Decker, SharkNinja, and Posche, and is developing various types of motor products for them in application fields such as vacuum cleaners, garden tools, hair dryers, and air compressors.

Starting from the second half of 2023, the company’s household sewing machine motor business began to gradually recover, and power tool motor orders entered the stage of accelerated mass production.

In terms of engine controller business, in 2023, the sales volume of DCU products of the company’s wholly-owned subsidiary, Shanghai Haineng, dropped significantly due to emission upgrades and technology upgrades. The GCU products are still in the research and development stage and have not yet started mass production, so the main business income is still at a low level. However, Shanghai Haineng still insists on continuously investing in research and development and project expansion in the field of engine controllers, and achieved good results in 2023 – small batches of aviation engine control systems were installed; domestically produced chip controllers were equipped with 2.6MW engines and passed customer acceptance; National VI natural gas engine control systems were equipped with K15N heavy-duty truck engines to achieve mass production. The mass production of the National VI natural gas engine control system is expected to provide strong support for Shanghai Haineng’s revenue and performance growth in 2024 and beyond.

New energy drive motor business is close to profitability, product structure adjustment and new customer development are going well

In 2023, Founder Motor has obtained a new ideal project. The company will provide drive motor stator and rotor components for its new generation of pure electric vehicles, and mass production and supply are expected to begin at the end of the second quarter of 2024. At the same time, the company has also been recognized by international customers, and its international business is being developed.

By the end of 2023, the company’s cumulative shipments will be nearly 2.6 million units, and its products will be used in more than 40 vehicle models. With the mass production of new customers and new projects, the company’s new energy drive motor business will cross the break-even point and begin to gradually release profits.

With the gradual increase in the penetration rate of new energy vehicles, the market size of new energy drive motors and electric drive systems has grown rapidly. In order to meet the growing demand of downstream customers in the future, the company will continue to invest in capacity construction in 2023, and partially complete and put into production the project of annual production of 1.8 million drive motors in Lishui, Zhejiang; Zhejiang Deqing plans to build a new project with an annual production of 3 million drive motors. The first phase of the annual production of 800,000 units has also been partially completed and put into production, and the main plant of the second phase of the annual production of 2.2 million units has started construction. From the perspective of the company’s long-term development, the above-mentioned capacity layout construction will have a positive impact on the company’s overall business development in the future, and provide fundamental guarantees for the company’s integration of high-quality resources, optimization of strategic layout, and enhancement of influence.

The top brokerage institutions have newly acquired shares, and the stock has risen by more than 10% in the past 5 days.

From the perspective of the company’s shareholder structure, as of the end of 2023, two leading securities institutions appeared among the company’s top ten circulating shareholders. The ninth largest circulating shareholder, “CITIC Securities Co., Ltd.”, held 0.72% of the circulating shares, and the tenth largest circulating shareholder, “GF Securities Co., Ltd.”, held 0.59% of the circulating shares. Both institutions are new holders.

Perhaps due to the exhaustion of the above-mentioned negative factors and the improving business climate in the motor industry, Founder Motor’s stock price has increased by more than 10% in the past five days (April 23 to April 29), reaching 11.22%.

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Post time: Jun-04-2024