Investment events
The company achieved total revenue of 1,208 billion yuan in 2022, an increase of 57.92% over the previous year, and achieved net profit of 8.95 million yuan to the mother, a decrease of 88.24% over the previous year. 2023Q1 achieved operating income of 157 million yuan, an increase of 26.77% over the previous year, and achieved net profit of 333.7739 million yuan.
Adhering to technology research and development as the core, large-scale transformation is expected to enter the recycling period. The company is expected to achieve revenue of 1,208 billion yuan in 2022, an increase of 57.92% over the previous year, and achieve net profit of 8.95 million yuan from the previous year, a decrease of 88.24% over the previous year. In 2022, the company's gross margin fell 17.1 percentage points year on year to 27.78%, mainly because the company was in a large-scale business transition period, and the share of large-scale businesses such as chemical storage and charging increased, and gross margin declined. On the other hand, rising raw material costs and poor supply chains in 2022 jointly affected gross profit margins. The company continues to increase R&D investment and technological innovation. The company's R&D investment in 2022 was 173 million yuan, accounting for 13.48% of revenue in 2022, an increase of 24.68% over the previous year.
The testing business drives the lithium battery equipment business and enhances core customer stickiness. In 2022, the company achieved lithium battery equipment revenue of 1,019 billion yuan, an increase of 58.40% over the previous year. The gross profit margin was 25.02%, down 16.56 percentage points from the previous year, mainly due to rising raw material costs and misaligned procurement cycles. The company leverages the advantages of its own testing technology to carry out testing services for downstream lithium battery companies through subsidiaries. While improving the company's technical level, the company has enhanced core customer stickiness, and transformed the company from traditional single equipment sales to a business model combining sales and service. The company has transformed and upgraded from a traditional equipment sales enterprise to a complex enterprise integrating product sales and technical service.
The “Optical Storage and Inspection Intelligent Overcharging Station” was launched, promoting the transformation of the energy storage business to large-scale companies to actively grasp energy storage technology trends and establish joint ventures with leading companies in the industry to establish energy storage business companies. In October 2022, the company's first standardized “optical storage and inspection intelligent overcharging station” was put into operation, and cooperation agreements were signed with many cities across the country to jointly promote the product. The company has maintained close cooperation with downstream battery manufacturers for a long time, and has strong continuity of cooperation for the development of the energy storage business. At the same time, the company's advantages in testing technology help the safe and stable operation of energy storage power plants. It is expected to achieve good development and open up new business growth points in the future.
Profit forecasting and valuation
Maintain profit forecasts and maintain the “buy” rating: The company is a leading supplier of lithium battery back-end equipment in China, with rapid expansion of energy storage and restoration of lithium battery equipment. We maintain our profit forecast for 2023-2024 and add a profit forecast for 2025. The estimated net profit for 2023-2025 is 1.80, 303, and 421 million yuan respectively. The corresponding EPS for 23-25 is 1.22, 2.05, and 2.85 yuan respectively, and the corresponding PE is 25, 15, and 11 times respectively. Maintain an “increase in holdings” rating.
Risk warning
Downstream demand falls short of expectations; risk of higher customer concentration; risk of rising raw material prices.