Event: In 2022, the company achieved revenue of 14.68 billion yuan, an increase of 14.9% over the previous year; achieved net profit of 4.1 billion yuan, an increase of 51.4% over the previous year; net profit of the non-return mother was 330 million yuan, an increase of 40.2% over the previous year. Among them, the company achieved revenue of 3.68 billion yuan in the fourth quarter, an increase of 6.3% over the previous year; achieved net profit of 70 million yuan, a decrease of 9.5% over the previous year; after deducting net profit of Fugimo, 0.2 billion yuan, a year-on-year decrease of 70%.
Profits have recovered and expenses are well managed. In 2022, the company's gross margin was 13.5%, an increase of 0.6 pp over the previous year; the net interest rate was 2.8%, an increase of 0.7 pp over the previous year. The profit margin recovered and the results of improving the product structure+self-production of raw materials were highlighted. On the cost side, the company's sales/management/finance expense ratio was 4.3%/6.4%/0.3%, respectively, compared to +0.05 pp/+0.2 pp/-0.3 pp, and the expense rate was properly controlled. The company's R&D expenditure rate was 4.2%, an increase of 0.5 pp over the previous year. It continued to increase R&D investment during the reporting period to strengthen the competitiveness of core products.
The cable business is growing steadily, with full coverage of multiple categories. The company's cable products can be divided into special cables, industrial cables, special cables and communication cables, with a rich variety. In 2022, the company's power cable segment revenue was 8.5 billion yuan, up 10.3% year on year, and product sales volume was 104,000 tons, up 3.4% year on year. Among them, Industrial Cable passed the durability test of KUKA robot's main body cable in 2022, breaking the domestic robot cable import substitution situation; the special electronic cable subsidiary achieved net profit of 90 million yuan, an increase of 33.8% over the previous year, due to increased revenue and the merger of Vietnamese companies during the reporting period. In addition, the company's communication cable product structure has been transformed from coaxial cable to security data cable, achieving revenue of 1.06 billion yuan in 2022, an increase of 22.4% over the previous year, gross margin of 16.8%, and a year-on-year increase of 1.6 pp.
Polymer materials+charging piles go hand in hand to open up room for growth. In 2022, the company's polymer materials achieved revenue of 4.65 billion yuan, an increase of 23.6% over the previous year, and gross margin was 15.4%, an increase of 2.6 pp over the previous year. Along with the increase in the proportion of high-pressure and ultra-high pressure products, profitability recovered. The company's Huzhou smart factory was completed and put into operation in 2022, and the “Wanma Wanhua Downstream Integration” project was launched at the same time. It is expected that the Wanhua project will add 600,000 tons of production capacity after full production. Furthermore, the company's 20,000 ton ultra-high voltage phase II base will be fully completed and put into trial production, providing sufficient guarantees for subsequent strong development. Furthermore, the company's charging pile business has achieved coverage of power products from 7kW to 480kW. The company's charging service business has remained stable. The charging time at some self-operated stations exceeds an average of 6 hours per day, and the charging usage rate has reached an industry-leading level. In 2022, Wanma's foreign sales of new energy charging equipment increased 39.1% year-on-year. In the future, as the company's pile sales scale continues to expand, services such as proxy operation are expected to improve further.
Profit forecasts and investment recommendations. The company's revenue for 2023-2025 is estimated to be 16.59 billion yuan, 18.74 billion yuan, and 22.15 billion yuan respectively. The year-on-year growth rate of net profit to the mother in the next three years will be 47.9%/29.1%/40.6%, respectively.
The company has an absolute leading edge in the high-pressure field. With the release of production capacity, quantitative profit is expected to gradually increase and maintain its “holding” rating.
Risk warning: the risk that downstream demand for cables falls short of expectations; the risk that the progress of new construction projects falls short of expectations; the risk of fluctuations in the macroeconomic situation; the risk that exchange rate fluctuations affect product export revenue.