The company released its 2022 annual report: annual revenue was 860 million yuan, an increase of 17.04% over the same period last year, and Guimu's net profit was 277 million yuan, compared with the same period last year, 37.58% over the same period last year.

Report for the first quarter of 2023:2023Q1 revenue was 246 million yuan, an increase of 9.07% over the same period last year; Guimu's net profit was 90 million yuan, a change of -16.37% over the same period last year.

The company's revenue and net profit to the mother grew steadily in 2022

Affected by the further expansion of the company's production capacity and the increase in product sales, the company's operating income and net profit from the mother increased slightly in 2022. Affected by the expansion of production scale and the increase in material preparation, the company's inventory at the end of 2022 was 1,381 million yuan, a sharp increase of 141.97% over the beginning of the year; of this, it issued 640 million yuan of goods, an increase of 214.32% over the beginning of the year, and 317 million yuan in products, an increase of 126.59% over the beginning of the year, and 382 million yuan in raw materials, an increase of 96.31% over the beginning of the year. Accounts receivable and notes receivable totaled $712 million, an increase of 15.79% over the previous year.

Before accruing bad debts, accounts receivable totaled 368 million yuan. C01 customers with the highest arrears were C01 customers, with an arrears balance of 223 million yuan; the ratio of accounts receivable accrued bad debts was 11.84%, with a total of 44 million yuan raised.

Customer concentration remains at a high level

In 2022, the company's top five customers accounted for 99.69% of sales, down 0.12pct from the same period last year, and customer concentration remained high. Among them, the largest customer is Group C, with sales of 759 million yuan, accounting for 88.28% of total annual sales, which has contributed greatly to the company's revenue.

Profit Forecasts, Valuations, and Ratings

We expect the company's revenue in 2023-2025 to be 11.60/1392/1,669 billion yuan (23-24 original value was 1,955/ 2,729 billion yuan), corresponding growth rate of 34.86%/19.94%/19.95% respectively, net profit of 3.66/440/528 million yuan (original value of 23-24 was 486/676 million yuan), corresponding growth rate of 32.01%/20.16%/20.04%, EPS is 2.10/2.52/3003 yuan/share, 3 years, respectively The CAGR is 23.94%. In view of the strong growth in the industry where the company is located, the company was given a valuation of 50 times in 2023. The corresponding stock price was 105.02 yuan, maintaining the “buy” rating.

Risk warning:

Systemic risk; risk of industry falling short of expectations; risk of a single product category; risk of order delivery falling short of expectations; risk of personnel changes.