Incident: The company published its annual report and quarterly report. In 2022, the company achieved revenue of 738 million yuan, YOY +17.3%; net profit of the mother was 166 million yuan, YOY +2.5%. Among them, in 2022Q4, the company achieved revenue of 348 million yuan, YOY +35.9%, +187.6% over the previous month; achieved net profit of -72 million yuan, YOY -20.9%, +105.7% month-on-month. The total fuel cell system sales power of the company throughout the year was 161.5 MW, YOY +175.73%. 2023Q1 achieved revenue of 48 million yuan, YOY -50.5%, -86.2% month-on-month; achieved net profit of -39 million yuan, YOY +69.6%, and -45.8% month-on-month.
Comment:
Policies have driven a sharp increase in sales, and fuel cell system costs have dropped significantly. Urban demonstration cluster policy rules were implemented, non-model cities actively promoted them. Sales of fuel cell vehicles increased dramatically in 2022, and the cumulative installed capacity of fuel cell systems throughout the year was 506.9 MW. Among them, the company insured 1,083 units, with a market share of 22.6%; the installed power was 108.8 MW, with a market share of 23.0%. The market share of the number of insured units and power caliber ranked first. By the end of December 2022, a total of 791 fuel cell vehicle announcements had been issued nationwide (excluding chassis announcements), including 121 vehicle announcements equipped with the company's fuel cell system, ranking at the forefront of the industry. The unit price/unit cost of the company's fuel cell system in 2022 was 0.42/0.25 million yuan/KW, respectively, a year-on-year decrease of -52.3%/-52.8%. Core components have been gradually localized, compounded by a doubling of sales volume, and the cost reduction of fuel cell systems has accelerated.
The company's cost investment remained high, and the Hong Kong stock market was successfully listed, providing a financial guarantee for the company's rapid growth.
The company's sales/management/R&D/financial expenses ratio in 2022 was 14.2%/28.9%/13.7%/-0.7% respectively, up 4.3/7.3/-1.1/0.9 pct over the previous year, mainly due to the company's increased investment in market development and talent reserve. We expect expenses to continue to improve during the company period as fuel cell vehicle sales continue to rise. The company was successfully listed on the Hong Kong Stock Exchange in January 2023, raising 950 million yuan for R&D, product promotion, channel construction and supplementary working capital, greatly relieving the pressure on the company's operating cash flow.
Investment advice: We are optimistic about the industry volume brought about by the implementation of local subsidy policies and rules, as well as the company's long-term growth space. The company's net profit for 2023-2025 is estimated to be -0.14/0.84/191 million yuan, and EPS is -0.12/0.71/1.62 yuan respectively. First coverage, giving a “buy” rating.
Risk warning: the risk of industry promotion falling short of expectations, the risk of bad accounts receivable debt, and the risk of performance forecasting and valuation judgments falling short of expectations.