Event: The company released its 2023 performance forecast. It is estimated to achieve operating income of 113-11.6 billion yuan in 2023, +2.97% to +5.70% year over year, net profit without return to mother of 22-260 million yuan, +1105.55% to +1324.74% year over year, and estimated net profit to mother of 300-360 million yuan, +229.65% to +295.58% year over year. Among them, we expect 23Q4 to achieve operating income of about 27.60-3060 billion yuan, +4.67% to +16.05%, and -0.22% to -10.00% month-on-month; realized net profit of 0.01 to 0.41 billion yuan, +103.25% to +210.78% year-on-year, and -99.02% to -66.71% month-on-month; realized net profit of 0.10-70 million yuan, +68.62% to +1043% year-on-month, and -93.03% to -52.80% month-on-month. The results are generally in line with market expectations.
Consumer electronics bottomed out in 23 years, and major mobile phone customers drove the company's growth. According to TrendForce, global laptop shipments in 2023 were 166 million units, -10.8% YoY; according to IDC data, global smartphone shipments in 2023 were 1.17 billion units, -3.2% YoY. With the arrival of a new switching cycle, driven by new technologies such as AIPC, the consumer electronics industry's boom is expected to bottom up in '24. The company has a stable position in the laptop market. The mobile phone business is rapidly increasing its share of adoption by major customers, and at the same time, the pack self-supply rate is steadily increasing. In the future, with the continuous expansion of new mobile phone customers, new models and new technologies, the company's consumer battery business is expected to usher in a second round of growth.
Power energy storage optimization and streamlining, focusing on core start-stop business. The company confirmed a total of 305 million yuan in asset impairment preparations for 2023, mainly due to the fact that the power business is still in its infancy, the scale effect is not obvious, and the unit cost is high. The company plans to increase capital and expand shares in the holding subsidiary Zhejiang Guanyu and introduce external investors. In the future, on the basis of maintaining the leading position in consumer batteries, the company will concentrate resources and technical advantages to develop businesses such as automobile start/stop and drone, focusing on high-quality business, which is expected to raise the profit level of the power sector.
Investment advice: Considering the slowdown in the company's moving and storage business, we lowered the company's 2023-2025 net profit to 3.40/9.63/1,314 million yuan (the original forecast value was 4.92/10.67/1,458 million yuan), +274.1%/+182.8%/+36.5% year-on-year, corresponding EPS was 0.30/0.86/1.17 yuan, maintaining the “buy” rating.
Risk warning: downstream demand falls short of expectations; capacity expansion and product development fall short of expectations; industry competition intensifies.