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Analysis Report: Debang Lighting (603303) 2024 Annual Report Analysis

1. Executive Summary

Debang Lighting's (603303) 2024 annual report highlights operational pressures, with declines in both operating revenue and net profit. Revenues from general lighting and automotive businesses fell year-on-year. The company adheres to a strategy of expanding civilian lighting, strengthening commercial lighting, and specializing in automotive businesses, actively promoting internationalization and enhancing risk control. Despite revenue decreases, the automotive business, focusing on "automotive controllers + automotive lighting," retains considerable development potential. In overseas markets, the company prioritizes localized service capabilities, though specific regional revenue data is not readily available.

2. Detailed Financial Analysis of Overseas Business

Overall Situation:

Debang Lighting prioritizes overseas markets, rapidly building localized service capabilities to drive high-quality foreign market growth. Overseas production bases' manufacturing and supply chain capabilities have been continuously strengthened, significantly enhancing the company's global delivery capabilities. In 2024, China's lighting industry export market demand remained stable, though the total export value decreased slightly by 0.3% year-on-year.

Market Distribution and Performance of Key Regions:

Specific overseas market distribution and performance data were not directly accessible. General lighting products are predominantly exported, with foreign market operating revenues surpassing domestic markets. Gross profit margins in foreign markets increased by 0.89 percentage points compared to the previous year.

Strategic Adjustment of Overseas Markets:

The company will "closely monitor international market changes and promptly adjust business strategies." While optimizing Chinese headquarters' service capabilities, it will swiftly establish localized service capabilities overseas, enhance local customer service, closely collaborate with industry-leading core customers, expand key customer groups, and actively seek new clients.

Risk Factors:

• Foreign Exchange Risk Management: Given the high proportion of export sales, primarily settled in USD, exchange rate fluctuations significantly impact operations. The company plans to conduct foreign exchange derivative transactions to lock in future transaction costs or earnings, mitigating exchange rate impacts.
• Market Competition Risk: The general lighting market is highly competitive, with international players like Philips, Osram, and GE dominating the high-end market, and fierce competition in the mid-range market.

3. Detailed Financial Analysis of Automotive Business

Overall Situation:

The automotive business focuses on the "automotive controller + automotive lighting" field, positioned upstream in the automotive industry chain. In 2024, the segment generated operating revenue of RMB 596 million, a 4.43% year-on-year decrease. New project orders exceeded RMB 1 billion, serving international brands like Porsche, Audi, Volkswagen, Nissan, and Toyota, as well as domestic automakers like Lixiang, GAC, Leap Motor, Changan, and Geely.

R&D Investment Analysis:

The Shanghai Automotive Business R&D Center is operational, continually enhancing automotive business R&D capabilities. 123 newly authorized patents were obtained, including 32 invention patents. Automotive controller products are becoming more intelligent and integrated, with the software-defined vehicle trend increasingly apparent.

Risk Factors:

The shift towards intelligent vehicles necessitates upstream component enterprises to adopt new technologies. Automotive controller products are evolving towards greater intelligence and integration, driven by the software-defined vehicle trend. Higher performance is required to support autonomous driving, intelligent networking, and other vehicle technologies. Automotive lighting is also becoming more intelligent, integrated, and energy-efficient.

4. Analysis of the Contribution of the Two Major Businesses to the Company's Overall Profit

General Lighting Business: Revenue of RMB 3.785 billion, a 6.35% year-on-year decrease. Automotive Business: Revenue of RMB 596 million, a 4.43% year-on-year decrease. Overall Profit: Net profit attributable to shareholders of listed companies was RMB 347 million, a 7.53% year-on-year decrease. Due to limited financial data, accurately calculating each business's profit contribution is not feasible. However, in terms of revenue scale, the general lighting business remains the primary income source, contributing relatively more to overall profit.

5. Key Findings and Conclusions

Performance Under Pressure: In 2024, Debang Lighting faced performance declines and needed to actively respond to market changes. Potential of Overseas Markets: Overseas markets remain a crucial growth area, requiring continued strengthening of localized service capabilities and risk control. Transformation of Automotive Business: Despite revenue decreases, the automotive business benefits from automotive intelligence trends, offering significant development potential as a key future direction. Technological Innovation: The company must continually embrace new technologies, enhance industry competitiveness, and deepen supply chain management through independent innovation and upstream-downstream cooperation to improve risk resistance.

6. Appendix: Data Charts

Chart 1: Composition of Debang Lighting's Operating Revenue in 2024 (General Lighting, Automotive Business, Others)
Chart 2: Trend of Debang Lighting's Net Profit in 2024
Chart 3: Newly Awarded Project Orders for Automotive Business
Chart 4: Revenue Share of Overseas Markets (if data available)

Please Note:

This report may have analytical limitations. For more accurate and comprehensive data, refer to Debang Lighting's official annual report and other public information. This report is for reference only and does not constitute investment advice.

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References:

[1] Hengdian Group Debang Lighting Co., Ltd. 2024 Annual Report Summary - Shanghai Stock Exchange - http://www.sse.com.cn/disclosure...
[2] Debang Lighting (603303)_Company Announcement - 2024 Annual Report - Sina - https://vip.stock.finance.sina.com...