Key points of investment
Event: The company released its 2023 performance report. According to the company's preliminary accounting, in 2023, the company achieved revenue of 122.96 billion yuan, -12.88% year on year; realized net profit to mother was 1,029 million yuan, +12.82% year on year after adjustment; net profit without return to mother was 785 million yuan, +3.0% year on year after adjustment. The company's initial accounting of net profit to mother is in line with our previous expectations.
Corresponding to 2023Q4, the company achieved revenue of 26.9 billion yuan, +2.8% year on year; net profit to mother of 134 million yuan, +3.4% year on year; deducted non-net profit of 82 million yuan, +0.4% year on year (all unadjusted).
Among the company's two major business segments, the industrial chain sector performed well: the company's supply chain segment mainly engaged in the bulk supply chain and mechanical and electrical trade business, with high revenue but low profit margins. In 2023, the company's revenue grew negatively and net profit to mother grew positively, reflecting the better overall performance of the industrial chain business. In the long run, the business barriers and profitability of the industrial chain are higher, and the company has a certain industrial accumulation in the fields of shipbuilding, large diesel generators, etc., so there is good room for future development.
In 2023, the company's industrial chain sector will vigorously explore the domestic market on the basis of stabilizing overseas markets. Through continuous product development and innovation, and firm green development, the company will further develop its advantages and value to help the company develop steadily. The supply chain sector faces insufficient demand and downward market pressure. The company actively optimizes the market structure and product structure, actively carries out supply chain business for high-value-added products, and stabilizes the company's “basic market”.
High-growth businesses such as diesel generators and shipbuilding are expected to drive the company's business to continue to grow rapidly: ① Diesel generator sets: 2023H1 achieved gross profit of 73 million yuan, +68.15% over the same period, and new orders in the domestic market exceeded 750 million yuan, mainly benefiting from strategic opportunities such as “East Digital Western Calculation”; ② Strong shipbuilding business: affected by increased transportation demand and stricter environmental requirements, etc., the demand for fleet replacement and new shipbuilding has increased markedly. The green energy-saving design of the company's core ship “Crown 63 PLUS” is widely recognized by the market. By the end of the 2023H1 period, the company had 57 ship manufacturing orders, of which 47 were ordered for the Crown 63PLUS. The order schedule is until 2026.
Profit forecast and investment advice: Sumeda is a state-owned enterprise with undervalued valuation+high dividends+certain growth potential. The dividend rate from 2020 to 22 was over 40%. The company is a benchmark for central enterprise reform with shareholding incentives for employees in the field of commerce and trade. The company's market-based assessment mechanism can stimulate employees' vitality and help promote the company's long-term sustainable development. According to the performance report, we slightly raised the company's 2023-2025 net profit forecast from 10.2/11.7/1.30 billion yuan to 10.3/11.7/1.30 billion yuan, or +12%/+13%/+11% year-on-year. The January 29th closing price corresponds to 10/9/8 times the P/E valuation. Maintain an “Overweight” rating.
Risk warning: commodity price fluctuations, macroeconomic cycles, exchange rate fluctuations, shipbuilding business delivery cycles, etc.