Introduction to this report:
The 23Q4 performance was in line with expectations, and net profit was greatly improved; capacity utilization continued to increase in '23, and the scale effect continued to be prominent; the white electric process was extended vertically, and the construction machinery and auto parts business was strengthened horizontally.
Key points of investment:
The investment proposal is to keep EPS unchanged at 0.91/1.09/1.37 yuan in 23-25, maintain the target price at $14.56, and maintain the “gain” rating.
23Q4 results were in line with expectations, and net profit deductions improved significantly. In 2023, the company expects to achieve net profit of 382-408 million yuan (median value of 395 million yuan), YoY of 45.2%-55.1% (median value of 50.2%); realized net profit of 343-370 million yuan (median value of 357 million yuan), YoY 63.7%-71.2% (median value of 67.5%). 23Q4 achieved net profit of 1-120 million yuan (median value of 110 million yuan), YoY 669%-823% (median value of 746%) in a single quarter; realized net profit of 0.94 to 121 million yuan (median value of 108 million yuan), compared to 100 million yuan in the same period in '22.
The capacity utilization rate continued to increase in 23 years, and the scale effect continued to be prominent. Benefiting from the continued boom in air conditioning, the company expanded production capacity and increased production schedule in '23, and the compressor business achieved rapid growth. Furthermore, the company is also actively expanding its customers, and continues to improve the company's profitability through internal lean management, and the company's operating capacity has achieved steady growth.
Extend the white power process vertically and expand the construction machinery and gasoline zero business horizontally. In the white electronics sector, the company successfully entered the washing machine supply chain. Furthermore, in the second half of '23, it plans to increase the delivery capacity of processed parts and assemblies and extend the processing process. In the construction machinery sector, the company is increasing its market development efforts and striving to achieve the target of full production capacity within the year. In the auto parts sector, the company has completed the verification and delivery of various lightweight materials and will continue to develop the market in the future.
Risk warning: Air conditioning production output and new field expansion fall short of expectations, macroeconomic recovery falls short of expectations, etc.