The company's performance was in line with expectations. Benefiting from the increase in spent fuel reprocessing capacity, the company's revenue in 2022 was 463 million yuan, an increase of 32.92%; Guimu's net profit was 122 million yuan, an increase of 59.2%. The performance was in line with expectations. The company is a leader in intelligent equipment in the domestic nuclear industry, with high scarcity, high growth and high barriers; it has benefited from accelerated nuclear power approvals and increased production capacity for spent fuel reprocessing. After the fixed increase project is put into operation, the company's smart equipment production capacity will be increased, and the business is expected to expand horizontally. We raised the 2023 profit forecast, maintained the 2024 profit forecast, and added the 2025 profit forecast; the estimated 2023-2025 company revenue was 651/854/1,252 million yuan (value before 2023 was 635 million yuan); Guimu's net profit was 1.60/2,28/300 million yuan (value before 2023), corresponding to EPS 1.94/2.77/3.64 yuan, and the current stock price corresponds to PE 45.1/31.7/24.1 times, maintaining the “buy” rating.
Profitability is improving, and the moat is wide and deep
The company's gross profit margin for the full year of 2022 was 47.68%, and the net profit margin was 26.24%. Profitability remained high and increased slightly. Among them, the gross margin of intelligent equipment in the nuclear industry reached 45.12%, up 1.19% from 2021; the gross margin of nuclear robots reached 50.82%, down 0.41% from 2021. The company's nuclear industry-related business accounts for over 90%. CNNC Puyuan, the second largest shareholder, is a wholly-owned subsidiary of CNNC and cooperates closely with CNNC; the entry threshold for nuclear industry supplier qualifications and product testing environments is both high. Customer stability is strong, barriers are high, and the moat is deep.
The fixed increase was implemented to expand the production capacity of intelligent nuclear equipment, and support glass curing equipment testing companies to issue no more than 3.5 million shares (no more than 30% of the company's total share capital before this issuance) to no more than 35 specific targets. The total capital raised did not exceed 211 million yuan. The capital was mainly used for high-end nuclear technology and equipment manufacturing base projects and supplementary working capital. The project cooperates with the Haiyan County People's Government. The construction period is 2 years. After it is put into operation, it will increase the production capacity of 25 sets of nuclear technology applications and intelligent nuclear chemical equipment; carry out R&D and trial production of special glass beads for glass curing to form a supply capacity of 300 tons/year of glass beads to meet the test application needs of glass curing equipment at this stage; and develop technical cooperation with research institutes and design institutes related to the domestic nuclear industry to promote the development of nuclear chemical technology.
Risk warning: The progress of connecting nuclear power plants to the grid fell short of expectations; the expansion of spent fuel production capacity fell short of expectations; and the domestic replacement process for smart equipment in the nuclear industry fell short of expectations.