Description of the event
In the first quarter of 2023, the company achieved operating income of 2,425 million yuan, a year-on-year decrease of 28.55%: Guimu's net profit of 142 million yuan, a year-on-year decrease of 57.15%; net profit of non-Guimu was -43 million yuan, a year-on-year decrease of 113.27%; net operating cash flow - 236 million yuan, a year-on-year increase of 65.67% over the previous year. The company's non-recurring profit and loss during the reporting period was 185 billion yuan, of which 172 million yuan was profit and loss from disposal of non-current assets.
Incident comments
In the first earnings season this year, the company's revenue side declined significantly from month to month due to insufficient demand from downstream customers and reduced orders. In terms of profit level, gross margin for the first quarter was 32.82 pct, an increase of 0.68 pct over the previous quarter. It was basically confirmed that 202Q4 was the bottom; the net interest rate was 6.39 pct, up 2.02 pct month-on-month due to reduced pressure on the cost side.
The company increased its capital expenditure in the first quarter. The investment scale of 573 million yuan reached a single-quarter high in recent years, mainly for construction projects such as CORACTIVE Industrial Plant, Yachuang Industrial Park, and Zhangjiagang Industrial Park, reflecting the company's optimistic judgment on the recovery of medium- to long-term demand. Yachuang Industrial Park is positioned as a world-class high-tech industrial park integrating PCB special equipment manufacturing, innovative industrial R&D, design and other functions; the Zhangjiagang project positions the largest production, R&D, sales and service base in East China, focusing on developing planar laser cutting machines, laser pipe cutters, 3D five-axis laser cutting machines, large format and coil custom laser cutting machines, bending and molding equipment, automated production lines, etc. The company bucked the trend and invested during the industry's trough, and is expected to take a head start in the future.
Judging from the first-quarter situation of the core subsidiary Daju CNC, PCB business revenue was 301 million yuan, down 67,43% from the same period last year; gross profit was 36.42 pct, down 0.98 pct from the same period last year, and the net interest rate was 17.1 pct, down 2.61 pct from the same period last year. Considering the long delivery cycle of PCB equipment, the current performance continued to be affected by the decline in capital expenditure of downstream customers last year.
Despite poor short-term sentiment, Daju Laser's on-hand orders showed an upward trend. The contract debt in the first quarter was 1,346 billion yuan, an increase of 34.75% over the previous year and an increase of 34.73% over the previous month, which is expected to drive revenue recovery.
We believe that the company's core business is expected to continue to recover as macroeconomics recovers and consumer demand improves, and smart terminals enter a new switching cycle. The company's net profit from 2023-2025 is estimated to be 1,602 million yuan, 1,971 million yuan and 2.356 billion yuan respectively. The corresponding PE is 16.65 times, 13.53 times, and 11.32 times, respectively, and continues to be optimistic.
Risk warning
1. The risk that demand falls short of expectations;
2. The progress of overseas plant construction falls short of the expected risk.