Incidents:
On April 24, 2023, the company released its 2022 annual report. During the reporting period, the company achieved revenue of 2,999 million yuan, +24.44% year on year, achieved net profit of 205 million yuan, -0.81% year on year, achieved net profit of 196 million yuan after deduction of non-Gwimo net profit of 196 million yuan, -3.31% year on year, and achieved basic earnings per share of 1.08 yuan/share.
Battery trays were quickly released, and R&D expenses increased significantly
In 2022, the company sold 569,700 sets of battery trays, a significant increase of 88.14% over the previous year. The rapid increase in battery tray sales led to a rapid increase in the company's revenue. In 2022, the company achieved revenue of 2,999 billion yuan, +24.44% over the same period last year. The company increased its investment in R&D. In 2022, R&D expenses were 159 million yuan, +57.31% year on year, and the R&D cost rate was 5.31%, +1.11pct year on year. The increase in expenses affected the increase in the company's net profit to the mother. In 2022, the company achieved a net profit of 205 million yuan to the mother, -0.81% over the same period last year.
Deeply bind high-quality customers and invest in building pallet production capacity
The company announced on December 11, 2022, that it signed a strategic cooperation agreement with Ningde Times to jointly carry out in-depth cooperation on NEV battery system cabinets, etc. On August 23, 2022, the company announced that it would compete for 910,000 square meters of land in Sanxiang Town, Zhongshan City for 52 million yuan. On March 14, 2023, the company announced the signing of a project investment agreement with the Liyang High-tech Zone Management Committee and the construction of a new energy battery aluminum alloy case project in two phases. It is estimated that sales revenue will exceed 1 billion yuan after delivery. We believe that the company's in-depth cooperation with customers and the expansion of production capacity will help the company continue to sell battery tray products and promote steady growth in the company's future performance.
Profit Forecasts, Valuations, and Ratings
The company's pallet products continue to be sold. We expect the company's revenue to be 46.34/6284/8.202 billion yuan respectively in 2023-2025, up 54.51%/35.59%/30.53%, respectively, and the three-year CAGR of 39.84%; Guimu's net profit was 4.16/6.21/879 million yuan respectively, up 103.46%/49.13%/41.63%, and the three-year CAGR is 62.58%; the corresponding EPS is 2.08/3.10/4.40 yuan/share, corresponding to PE, respectively 13.6/9.1/6.4 times respectively. Combining relative valuation and absolute valuation results, we gave the company 25 times PE for 23 years, corresponding target price of 52.00 yuan, maintaining the “buy” rating.
Risk warning: downstream demand falls short of expectations, capacity construction falls short of expectations, risk of fluctuations in raw material prices, increased risk of industry competition