Incidents: In 2022, the company achieved revenue of 1.34 billion yuan, an increase of 11.2% over the previous year; it achieved net profit of 220 million yuan, an increase of 0.9% over the previous year; after deducting net profit of non-return mother's net profit of 130 million yuan, a decrease of 36% over the previous year, mainly due to the company's indirect disposal of Leisai Juyuan's shares during the reporting period, which led to an increase in non-recurring profit and loss. In 2023Q1, the company achieved revenue of 301 million yuan, an increase of 4.1% over the previous year; achieved net profit of 40 million yuan, a decrease of 35.6% over the previous year; after deducting net profit of non-return mothers, a year-on-year decrease of 39.8%.
With the rapid release of servo systems, the new energy business is expected to increase rapidly. In 2022, the company's servo system achieved revenue of 400 million yuan, an increase of 26.8% over the previous year, and the revenue share increased 3.7 pp to 30%. Among them, the performance of products such as the AC servo L7 universal series has basically reached the level of similar products abroad, and the localization rate is expected to increase further. The company's servo products are mainly divided into low voltage servos and AC servos. Among them, the growth of low voltage servos has stagnated due to the downturn in the downstream inkjet printing industry; sales revenue of AC servos used in new energy such as photovoltaics, lithium batteries, and semiconductor industries increased 30% year-on-year, benefiting from the continued high prosperity of the downstream new energy industry, driving the increase in the company's shipment volume. The company's new energy business customers are of high quality, and the cost of self-developed encoders has been gradually reduced, which is expected to benefit from a sharp increase in downstream volume driven by servo volume.
The distribution team gradually grew, making concerted efforts at home and abroad. The company's direct sales revenue in 2022 was about 1 billion yuan, up 9.8% year on year, accounting for 74.4%; distribution revenue was 3.4 billion yuan, up 15.6% year on year, accounting for 25.6%.
In 2022, the company further changed its marketing system, reorganized the distribution system, and gradually upgraded from “direct sale+distribution as a supplement” to a new model of “channel-based main+complementary and win-win” for large-scale industry marketing. At the same time, leveraging channel customer stickiness and service experience is expected to drive the company's development into the fast track.
The equity incentive+employee stock ownership plan shows confidence in the company's development. The company released the 2023 Employee Stock Ownership Plan (Draft) in January 2023. The holders of the plan are middle and grassroots managers and core technology (business) cadres working for the company and its subsidiaries. The number of participants is not more than 71. Furthermore, in August 2022, the company announced the 2022 Employee Stock Ownership Plan (Draft) and Equity Incentives (Draft), demonstrating the company's confidence that future performance will continue to grow.
Profit forecasts and investment recommendations. The company's revenue for 2023-2025 is estimated to be 1.57 billion yuan, 1.96 billion yuan, and 2.31 billion yuan respectively. The growth rate of net profit attributable to the mother in the next three years is 12%/26.9%/25.4%, respectively. The company has accelerated the integrated layout of industrial control products and further expanded its technical advantages. In the long run, it is expected that its performance will be fully realized and that it will maintain its “holding” rating.
Risk warning: the risk that demand in the downstream industrial control market falls short of expectations; the risk of product prices falling due to increased market competition; the risk that raw material prices will rise; the risk that exchange rate fluctuations affect the company's overseas business revenue; the risk that dealer channel expansion falls short of expectations.