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Nexteer Automotive Group Limited (HK:1316)
:1316
RESEARCH TOOLSreports
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Nexteer Automotive Group
(OTC:1316)
Rating:80Outperform
Price Target:
HK$6.50
▲( 5.86% Upside)
Positive Factors
Market Demand
New bookings from Chinese automakers reached a new high of 39%, surpassing the previous year's 28%, indicating strong demand in China.
Strategic Expansion
The Changshu production plant and Mexico technology centre are expected to support Nexteer's strategic expansion plans, strengthening its medium-term prospects.
Technological Advancements
Nexteer is set to mass produce its SbW products, which will serve as a new revenue driver, with positive momentum in industry adoption.
Negative Factors
Earnings and Profitability
Earnings have been revised down due to higher taxes, despite EBITDA margin recovery remaining intact.
Sales and Revenue Outlook
The FY25F new bookings guidance of USD5bn is down 17% year-over-year, indicating a muted outlook.
Trade and Tariffs
Weaker global auto sales and potentially higher US tariffs may slow growth at Nexteer’s US operations.
Nexteer Automotive Group (1316) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
$15.56B
Dividend Yield0.47%
Average Volume (3M)17.72M
Price to Earnings (P/E)32.3
Beta (1Y)1.66
Revenue Growth1.31%
EPS Growth67.13%
CountryHK
Employees12,600
SectorConsumer Cyclical
Sector Strength74
IndustryAuto - Parts
Share Statistics
EPS (TTM)N/A
Shares Outstanding2,509,824,200
10 Day Avg. Volume19,826,913
30 Day Avg. Volume17,716,917
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)0.85
Price to Sales (P/S)0.00
P/FCF Ratio27.46
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.49Price Target Upside5.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Nexteer Automotive Group Business Overview & Revenue Model
Company DescriptionNexteer Automotive Group (1316) is a leading global manufacturer specializing in advanced steering and driveline systems. The company operates in the automotive sector, providing high-quality steering and driveline products to major Original Equipment Manufacturers (OEMs) worldwide. With a focus on innovation and technology, Nexteer offers a range of products including electric power steering, hydraulic power steering, steering columns, and driveline systems, catering to the evolving needs of the automotive industry.
How the Company Makes MoneyNexteer Automotive Group generates revenue primarily through the design, manufacture, and sale of steering and driveline products to automotive OEMs. The company has established long-term contracts and partnerships with major automotive manufacturers, which serve as key revenue streams. Nexteer's revenue model is heavily reliant on its ability to innovate and provide technologically advanced solutions that meet the safety, performance, and efficiency demands of its clients. Additionally, Nexteer's global manufacturing footprint allows it to serve a diverse customer base while optimizing operational costs, contributing to its overall profitability.
Nexteer Automotive Group Financial Statement Overview
Summary
Nexteer Automotive Group demonstrates strong financial health with consistent revenue growth and improved profitability. The balance sheet reflects minimal leverage with a solid equity base, while cash flow performance is robust. However, operational margins can be enhanced further.Income Statement
The company has shown consistent revenue growth with a 1.65% increase in 2024 from 2023. Gross profit margins have improved to 11.26%, reflecting better cost management. Net profit margin rose to 1.44%, indicating a slight improvement in profitability. However, EBIT and EBITDA margins are relatively low at 2.68% and 7.06%, respectively, suggesting room for operational efficiency improvements.75
Positive
Balance Sheet
The debt-to-equity ratio is low at 0.05, indicating minimal leverage and a strong equity base. Return on equity stands at 3.12%, showing moderate profitability. The equity ratio is 56.87%, signifying a solid financial structure with more than half of the assets financed by equity.80
Positive
Cash Flow
There is a robust free cash flow growth of 79.37% from 2023 to 2024. The operating cash flow to net income ratio is strong at 7.23, indicating efficient cash conversion. The free cash flow to net income ratio is 2.67, reflecting healthy cash flow generation relative to net income.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.28B | 4.21B | 3.84B | 3.36B | 3.03B | Gross Profit |
| 481.42M | 368.59M | 367.15M | 363.43M | 407.94M | EBIT |
| 114.77M | 61.40M | 86.58M | 108.67M | 165.39M | EBITDA |
| 302.05M | 357.48M | 362.74M | 370.10M | 348.89M | Net Income Common Stockholders |
| 61.72M | 36.74M | 58.01M | 118.44M | 116.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 422.28M | 311.74M | 245.93M | 326.52M | 553.42M | Total Assets |
| 3.48B | 3.40B | 3.34B | 3.21B | 3.31B | Total Debt |
| 91.59M | 100.39M | 110.71M | 146.76M | 305.99M | Net Debt |
| -330.68M | -211.35M | -135.22M | -179.75M | -247.43M | Total Liabilities |
| 1.45B | 1.39B | 1.36B | 1.20B | 1.38B | Stockholders Equity |
| 1.98B | 1.96B | 1.93B | 1.95B | 1.88B |
| Cash Flow | Free Cash Flow | |||
| 164.89M | 91.91M | 173.41M | 145.78M | 270.10M | Operating Cash Flow |
| 446.23M | 404.12M | 293.76M | 287.38M | 419.85M | Investing Cash Flow |
| -279.79M | -299.15M | -263.47M | -285.66M | -288.00M | Financing Cash Flow |
| -43.16M | -38.40M | -85.18M | -215.45M | -186.94M |
Nexteer Automotive Group Technical Analysis
Positive
6.14
Price Trends
5.08
Positive
4.56
Positive
3.74
Positive
Market Momentum
0.39
Negative
69.06
Neutral
84.58
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1316, the sentiment is Positive. The current price of 6.14 is above the 20-day moving average (MA) of 5.32, above the 50-day MA of 5.08, and above the 200-day MA of 3.74, indicating a bullish trend. The MACD of 0.39 indicates Negative momentum. The RSI at 69.06 is Neutral, neither overbought nor oversold. The STOCH value of 84.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1316.
Nexteer Automotive Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $15.56B | 32.31 | 3.13% | 0.47% | 1.31% | 67.13% | |
72 Outperform | $1.30T | 26.09 | 23.91% | 0.76% | 33.89% | 45.52% | |
70 Neutral | HK$187.70B | 8.66 | 14.58% | 2.66% | 5.32% | 10.61% | |
62 Neutral | $6.97B | 11.36 | 2.77% | 3.91% | 2.66% | -22.00% | |
61 Neutral | $15.09B | 4.70 | 8.00% | ― | -3.96% | -60.66% |
* Consumer Cyclical Sector Average
Performance Comparison
HK:1316
Nexteer Automotive Group
6.14
1.96
46.71%
HK:1211
BYD Co
462.60
254.16
121.94%
HK:1114
Brilliance China Automotive Holdings
3.13
0.77
32.57%
HK:2333
Great Wall Motor Co
12.30
-1.33
-9.74%
Nexteer Automotive Group Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q1-2025)
| % Change Since: 5.32%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong business performance with record program launches and strategic expansions in Motion-by-Wire technology. Despite facing challenges from a dynamic tariff environment and potential market volatility in North America, Nexteer demonstrates effective mitigation strategies and is positioned for above-market growth.Q1-2025 Updates
Positive Updates
Record New Program Launches
In Q1 2025, Nexteer achieved a record of 23 new program launches, including 14 for battery electric vehicle platforms and 19 as new or conquest business. This includes significant launches across all regions: 3 in North America, 5 in EMEASA, and 15 in APAC.
Strong New Business Wins
Nexteer secured $0.8 billion in bookings in Q1 and is forecasting $5 billion for the full calendar year. Notable wins include high-end products like rear-wheel steering, rack EPS, and dual opinion EPS, as well as re-securing an important column business with a North American customer.
Expansion of Motion-by-Wire Portfolio
Nexteer expanded its Motion-by-Wire chassis portfolio with innovations in Steer-by-Wire, rear-wheel steering, Brake-by-Wire, and software, demonstrating strong alignment with industry trends and demand in China.
Above-Market Revenue Growth
Nexteer is on track to deliver above-market revenue growth of 200 to 300 basis points year-over-year, driven significantly by growth with China OEMs.
Tariff Mitigation Strategies
Nexteer has effectively mitigated tariff exposure through a regional supply chain strategy and is actively negotiating with customers and suppliers to manage costs.
Negative Updates
Tariff Environment Challenges
Nexteer faces a dynamic tariff environment impacting non-USMCA compliant shipments and reciprocal tariffs between the US and China, necessitating ongoing mitigation efforts.
Potential North America Market Volatility
There is uncertainty related to North American production volumes due to the tariff situation, with potential volatility expected in the latter half of the year.
Company Guidance
During Nexteer Automotive's 2025 first quarter investor communication call, the company reported a record of 23 new program launches, including 14 for battery electric vehicle platforms and 19 for new or conquest business, with significant activity in APAC, EMEASA, and North America. Notably, Nexteer secured $0.8 billion in Q1 bookings, forecasting $5 billion for the full year, with 36% of new business coming from electric power steering and 45% from columns, primarily driven by gains in North America. The company is expanding its Motion-by-Wire chassis portfolio and leveraging its technology leadership to capture more by-wire related bookings, especially in China. Revenue growth is expected to outpace the market by 200 to 300 basis points, driven by initiatives to reduce fixed costs, optimize footprint, and improve supply chain efficiency, despite the ongoing dynamic tariff environment.Nexteer Automotive Group Corporate Events
Nexteer Automotive Unveils Value Creation Plan and 2025 Grant
Apr 15, 2025
Nexteer Automotive Group Limited has announced the adoption of a Value Creation Plan (VCP) and the approval of the 2025 Grant, which includes the issuance of Performance and Restricted Units to senior management. This initiative aims to incentivize management through cash payments based on performance metrics and continuous service, without diluting existing shareholder value. The plan is expected to enhance the company’s operational efficiency and strategic positioning in the automotive industry.
Nexteer Automotive Declares Final Dividend for 2024
Mar 19, 2025
Nexteer Automotive Group Limited announced a final ordinary cash dividend of USD 0.0087 per share for the year ended December 31, 2024. The dividend will be approved by shareholders on June 18, 2025, with payment scheduled for July 9, 2025. This announcement reflects the company’s commitment to providing returns to its shareholders and may impact its financial positioning and investor relations.
Nexteer Automotive Reports Strong 2024 Financial Results
Mar 19, 2025
Nexteer Automotive Group Limited reported its annual financial results for the year ending December 31, 2024, showing a significant increase in profitability. The company achieved a gross profit of $448.5 million, up from $368.6 million in 2023, with a notable rise in operating profit to $114.8 million from $61.4 million the previous year. This growth was driven by increased revenue and effective cost management, despite higher engineering and product development expenses. The results indicate a strong operational performance and positive outlook for stakeholders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.