incident. The company disclosed its 2022 annual report and 2023 quarterly report: 1) 2022: The company achieved revenue of 2,822 million yuan, an increase of 101.64% over the previous year; Guimu's net profit was 267 million yuan, an increase of 190.11% over the previous year; among them, 2022 Q4's single-quarter revenue was 928 million yuan, an increase of 91.86% over the previous year; and Guimu's net profit was 80 million yuan, an increase of 123.39% over the previous year. 2) 2023Q1: The company achieved revenue of 766 million yuan, YOY +106.33%; net profit of the mother was 88 million yuan, yoy +489.96%; after deducting net profit of the non-return mother, 70 million yuan, YOY +542.08%.
The company's business in the power and energy storage battery sector grew rapidly in 2022, with a gross margin of +1.14pct over the same period last year. According to the company's 2022 annual report, the company's main business divisions are as follows: 1) consumer electronics: revenue of 134 million yuan, yoy -13.35%; gross margin was 46.34%, yoy-2.58pct; 2) power and energy storage batteries: revenue of 2,335 million yuan, yoy +134.20%; gross margin was 32.88%, yoy+1.14pct; 3) Optical Communications: revenue of 0.08 billion yuan, yoy -31.86%; gross margin was 58.49%, yoy+1.28pct; 4) automobiles and hardware: Revenue was 237 million yuan, yoy +38.70%; gross margin was 46.45%, yoy+0.05pct; 5) Others: revenue was 19 million yuan, yoy +8.29%; gross margin was 46.27%, yoy-3.01pct. Expense control was good in 2022, operating leverage was gradually released, and net interest rates increased steadily. 1) 2022: The company's gross margin and net interest rate were 35.94%/9.46%, respectively, year-on-year - 1.10pct/+2.88pct; the cost rate for the period was 25.17%, year-on-year - 7.00pct. 2) 2022Q4: The company's gross margins and net interest rates were 35.95%/8.58%, respectively, and -2.47pct/+1.21pct, respectively; the cost ratio for the period was 25.04%, -6.82pct over the previous year. 3) 2023Q1: The company's gross margins and net interest rates were 36.02%/11.49%, year-on-year - 2.42pct/+7.46pct; +0.07pct/+2.91pct; in terms of cost rates, the sales/management/R&D/finance expense ratio was 3.68%/16.03%/7.13%/-0.24%, year-on-year - 2.11pct/-7.25pct/+0.53pct /-0.40pct, respectively.
New orders and in-hand orders continue to grow, and subsequent performance growth is guaranteed. According to the company's 2022 annual report, the company made full use of its technical advantages and customer resources in the power battery and energy storage battery industry to respond positively to customer needs and provide technical solutions that satisfy customers in a timely manner. New orders and in-hand orders continued to grow in 2022, and the proportion of customers was more balanced. At the end of 2022, on-hand orders amounted to 4,531 billion yuan (tax included), an increase of 32.40% over the previous year, providing a guarantee for the company's subsequent performance growth. New technologies such as large cylindrical batteries continue to emerge, and companies are expected to benefit. According to the company's 2022 annual report, the 4680 large cylindrical battery uses new electrode materials and structural design, has higher energy density and better heat dissipation performance, can improve the range, acceleration performance and charging speed of electric vehicles, and has a longer service life and higher safety performance. The 4680 battery places higher demands on laser welding due to structural changes, including more difficult pole-ear welding processes and faster welding and assembly speed requirements. The company's technical accumulation in the field of laser welding over the years has a certain first-mover advantage in solving the 4680 battery welding problem, which is expected to benefit.
Valuation. The company's net profit for 2023/2024/2025 is estimated to be 487/681/852 million yuan, an increase of 82.6%/39.7%/25.2% over the previous year; EPS is 1.44/2.02/2.53 yuan. Comparable companies forecast an average PE valuation value of 15.13 times in 2023. Considering that the company has a great advantage in the field of power battery welding and has a first-mover advantage in 4680 battery welding, we gave the company 25 times PE valuation in 2023. The target price was 36.12 yuan/share (the company's EPS is expected to be 1.44 yuan in 2023), with a target market value of 12.2 billion yuan. For the first time, coverage was given a “superior market” rating. Referring to the PB valuation, the company's 2023 PB was 3.76 times (comparable companies' 2023 PB average was 3.66 times), which is reasonable.
risk. The progress of the downstream battery expansion project fell short of expectations; industry competition intensified; repayment risks; and the release of the company's production capacity fell short of expectations.