Incident: The company released the first quarter report of 2023, achieving revenue of 519.86,000 yuan, an increase of 39.8% over the previous year; achieving net profit of 5,818 million yuan, an increase of 157.6% over the previous year; and achieving net profit of 4,80.5 million yuan after deducting non-return mother's net profit, an increase of 149.24% over the previous year.
First-quarter results maintained high year-on-year growth, and operating efficiency continued to improve. The company's on-hand orders in the first quarter were successfully accepted as planned. The profit growth rate was significantly higher than the revenue growth rate, indicating a significant increase in the company's operating efficiency: the company's gross margin for the first quarter of 2023 was 54.28%, an increase of 2.9 percentage points over the previous year; the net interest rate was 11.19%, an increase of 5.12 percentage points over the previous year. As the scale of the company's operations continues to expand, we are optimistic that subsequent scale effects will continue to appear.
The construction of production capacity for spent fuel processing will greatly drive market demand for intelligent equipment. As China's nuclear power construction accelerates, the number of new spent fuel added each year will gradually increase. It is estimated that China will add 2,467 tons of spent fuel per year in 2030, and the CAGR will reach 11.5% in 2021-2030. China's spent fuel recycling technology was completed late. Currently, there is only an experimental production capacity of 50 tons per year, and supply is seriously insufficient. In this context, China has already built a total of 400 tons of new production capacity per year, and it is expected that the construction of spent fuel treatment production capacity will continue to rise in the future. The spent fuel treatment process is highly radioactive, and the intelligent equipment and machines used must have characteristics such as radiation resistance, high reliability, and long life. Therefore, the technical requirements for the design, materials, and structure of equipment and robot manufacturing are extremely high, and the technical barriers in the industry are high. According to estimates, China needs to build 3-4 800t grade spent fuel treatment plants by 2035 to meet China's spent fuel treatment needs. If three 800-ton spent fuel treatment plants were built, the corresponding market space for intelligent equipment would be 35.86 billion yuan, which translates into an average annual additional investment of 2.7 billion yuan in 2022-2035.
The company is a scarce target in the field of intelligent nuclear industry, and its competitiveness in the field of nuclear industry equipment is outstanding. In terms of products, the company's intelligent equipment and robot products for the nuclear industry have strong competitiveness and outstanding technical advantages in the domestic market. CNNC Puyuan, a subsidiary of CNNC, is the second largest shareholder of Jingye Intelligence. The synergies between industry and capital are remarkable. The company has become an important intelligent equipment supplier within the CNNC system and has a card advantage. We believe that with the support of technological advantages and industry advantages, the company already has strong competitiveness in the nuclear industry.
The fixed increase project is about to be implemented, and there is great potential to explore the submarine nuclear industry chain. The total amount of capital to be raised for this fixed increase project will not exceed 211 million yuan for the construction of a high-end nuclear technology equipment manufacturing base in Haiyan, Zhejiang. Through this fixed increase, the company will further expand its production capacity for nuclear intelligent equipment. It is expected that after production is put into operation, it will increase the production capacity of 25 sets of nuclear technology applications and intelligent nuclear chemical equipment. At the same time, R&D and trial production of special glass beads for high-release waste liquid treatment will be carried out, forming a glass bead supply capacity of 300 tons/year. The company continues to explore the intelligent manufacturing industry chain of the submarine nuclear industry. The research projects are mainly carried out in emerging fields such as nuclear drugs, digital operation and maintenance of nuclear power plants, and decommissioning of nuclear power plants. The future prospects are worth looking forward to.
Maintain an “increase in holdings” rating. Benefiting from the rapid development of nuclear power and the trend of intelligent nuclear fuel cycle industry, the market for intelligent equipment in the nuclear industry is expected to improve in the long term. The company's net profit for 2023-2025 is estimated to be 166, 224, and 300 million yuan respectively, and the corresponding PE is 39.5, 29.2, and 21.9 times respectively. The company is one of the targets with the highest “core content” in terms of revenue share in the secondary market. It has scarcity and continuous growth, and maintains an “increase in holdings” rating.
Risk warning events: risk of policy changes; risk of high customer concentration; risk of performance fluctuation due to discontinuous order acquisition; risk of fund-raising projects falling short of expectations; seasonal risk of performance; risk of untimely updates of information used in research reports; risk of deviations in industry size measurement.