Core views:
Incident: The company announced its 2023 performance report, achieving revenue of 20.072 billion yuan (YOY +26.73%), net profit attributable to mother of 3.341 billion yuan (YOY +22.93%), after deducting net profit of 3.239 billion yuan (YOY +23.51%). An executive increase in their holdings was announced on February 3. General Counsel Mr. Liang Guowei and Deputy General Manager Mr. Wang Yuefeng increased their holdings by 20,000 shares and 5,000 shares respectively on February 2. Mr. Wang Yuefeng plans to continue to increase their holdings by no less than 6,000 shares and no more than 10,000 shares within 6 months (including the increase on February 2).
Comment: Q4 revenue increased 39.27% year over year, orders are expected to gradually improve, and the increase in executive holdings shows confidence in development. The company achieved revenue of 4.713 billion yuan (YOY +39.27%) and net profit of 447 million yuan (YOY +3.35%) in Q4. Q4 The revenue side is growing fast, and orders are expected to gradually improve. The profit side growth rate is slow, and we judge that it is mainly due to year-end expenses. Looking at the whole year, the company's performance grew steadily, mainly due to the continuous consolidation of its preferred position as a supplier of market interconnection solutions in the defense sector; new results achieved in communication and industrial business operation quality and rapid growth in data centers, petroleum equipment, photovoltaic energy storage, etc.; the coverage rate of mainstream car companies in the NEV business continued to increase, and multiple projects were targeted throughout the year; the international layout continued to accelerate, and the “big customer+region” market development model was implemented. At the same time, intelligent manufacturing construction and “cost efficiency engineering” help further improve quality and efficiency. On February 3, the company issued an announcement regarding plans for some senior management to increase their holdings of the company's shares and subsequent plans to increase their holdings. Mr. Liang Guowei, general counsel of the company, and Mr. Wang Yuefeng, deputy general manager, increased their holdings of the company's shares based on confidence in the company's continued stable and healthy development in the future. The two increased their holdings by 20,000 shares and 5,000 shares respectively on February 2, with an increase of 60.38 million yuan and 158,800 yuan respectively. At the same time, Mr. Wang Yuefeng plans to continue to increase his holdings by no less than 6,000 shares and no more than 10,000 shares within 6 months.
Profit forecast and investment advice: EPS is expected to be 1.58/2.00/2.51 yuan/share in 23-25. I am optimistic that the company's connector circuit will continue to rise. Demand for information technology construction in the defense sector will resonate with the communication industry and the new energy sector. Referring to comparable company valuations, the company will be given a PE valuation of 28 times in 24 years, corresponding to a reasonable value of 55.87 yuan/share, maintaining a “gain” rating.
Risk warning: Market expansion falls short of expectations, equipment demand and delivery expectations are low, policy adjustments, etc.