The company released its 2022 annual report and the first quarter report of 2023. The company achieved revenue of 5.913 billion yuan in 2022, an increase of 2.86% over the previous year, and achieved net profit of 246 million yuan, a decrease of 13.57% over the previous year; the first quarter of 2023 achieved operating income of 1,427 million yuan, an increase of 5.98% over the previous year, and the net profit of Guimo was 86 million yuan, an increase of 65.28% over the previous year.
As one of the leading fan spindle companies, we believe that with the release of wind power installation demand in 2023, the company's profitability is expected to continue to recover, the company's performance is expected to return to a growth trajectory, and continue to maintain the rating for increased holdings.
Key points to support ratings
Influenced by the wind power industry, the results for the full year of '22 were under slight pressure. Affected by the phased decline in installed demand in the wind power market and diversified market competition, the development of the company's relatively large wind power business fell short of expectations, which had an adverse impact on the company's overall performance. In 2022, the company achieved operating income of 5.913 billion yuan, an increase of 2.86% over the previous year, and achieved net profit of 246 million yuan, a decrease of 13.57% over the previous year, a comprehensive gross profit margin of 15.75%, a year-on-year decline of 1.70 pct, a net profit margin of 4.23%, and a year-on-year decline of 0.99 pct.
Demand for wind power installations was gradually released in '23, and the company's profitability continued to improve. With the gradual commencement of wind power projects left over from '22 and projects that completed tenders, demand for wind power installations was gradually released, and the company's capacity utilization rate picked up, leading to a continuous improvement in profitability. The first quarter of 2023 achieved operating income of 1,427 million yuan, an increase of 5.98% over the previous year, and achieved net profit of 86 million yuan, an increase of 65.28% over the previous year; the comprehensive gross profit margin was 19.06%, an increase of 5.01 pct over the previous year, an increase of 0.77 pct over the previous month; the net interest rate was 6.09%, an increase of 2.14 pct over the previous year, an increase of 1.22 pct over the previous year.
The company's wind power spindle products have significant competitive advantages, and convertible bond fund-raising projects have helped expand production and increase efficiency. The competitive advantage of the company's wind power products business is remarkable. The world's first 9 MW wind power forging spindle went offline during the reporting period, fully demonstrating the company's comprehensive manufacturing strength and technical equipment advantages throughout the industry chain. In June 2022, the company's convertible bonds were successfully issued. The funds raised were mainly used for large-scale offshore wind power product supporting capacity enhancement projects and energy-saving material-saving process and equipment upgrading projects for core components of high-end equipment. Among them, the energy-saving process and equipment upgrading project for core components of high-end equipment plans to build a 70,000-ton heavy die forging press and supporting facilities to upgrade the technical route of wind power spindles, the most important product type in forgings, from free forging to die forging. Die forging technology can greatly improve material utilization, shorten machining time, improve production efficiency, and enhance the company's overall competitiveness.
valuations
According to the downstream demand situation of the company's various businesses, the company's profit forecast is adjusted. It is estimated that 2023-2025 will achieve operating income of 71.44/80.78/8.80 billion yuan and net profit of 387/554/713 million yuan, maintaining the increase in holdings rating.
The main risks faced by ratings
The installation of wind power falls short of expectations; the risk of fluctuations in raw material prices; and the progress of fund-raising projects falls short of expectations.