This report is read as follows:

In 2022, the company realized revenue of 3.483 billion yuan, an increase of 64.07%, and a net profit of 149 million yuan, an increase of 13.69%. The performance was in line with expectations. In 2023, the company's revenue is expected to continue high growth, profitability will also usher in an inflection point.

Main points of investment:

Lower the target price to 55. 36 yuan to maintain the overweight rating. Affected by the intensification of competition in the industry, the company's EPS forecast for 2023-2025 is 1.73,0.18,2.61,0.07 / 3.84 (new) yuan, with reference to comparable companies giving the company 32 times PE in 2023, lowering the target price to 55.36 yuan (originally 66.85 yuan) to maintain the overweight rating.

The performance is basically in line with expectations, and profitability is affected to a certain extent. In 2022, the company realized revenue of 3.483 billion yuan, an increase of 64.07%, a net profit of 149 million yuan, an increase of 13.69%, a deduction of 102 million of non-net profit, a decrease of 4.92%, of which Q4 revenue of 1.317 billion yuan, an increase of 83.94%, and a net profit of 51 million yuan, an increase of 692.63%. In 2022, the company's gross profit margin was 17.82%, a decrease of 5.67 pct. profitability was affected to some extent; the main expense rates all decreased to some extent, and the sales / management / R & D expense rate was 2.43 per cent, 4.42 per cent, 6.94 per cent, a decrease in 0.86/1.07/0.9pct.

Equipment business and electric drive business have achieved rapid growth, and high revenue growth is expected to be maintained. In 2022, the company's intelligent equipment business achieved an income of 2.395 billion yuan, an increase of 46.23%, and a new order of 3.666 billion yuan, an increase of 22.65%. At the same time, in terms of inventory and contract liabilities, the company's equipment business is also expected to maintain high growth; electric drive business revenue of 1.085 billion yuan, an increase of 128.11%, gradually achieve ideal, NIO Inc., Geely, Guangzhou Automobile and other customers designated.

Profitability gradually ushered in an inflection point. The gross profit margin of the company's equipment business has declined to a certain extent since Q4 in 2021, and the company's equipment business is expected to see a profit inflection point in 2023 as raw material costs fall and orders with higher profitability begin to cash in; at the same time, the scale effect of the electric drive business is gradually reflected and the product structure is continuously optimized, and it is expected that the gross profit margin will continue to increase in the future.

Risk hint: the risk that the profit of the electric drive business is lower than expected, and the risk of a slowdown in smart equipment revenue.