occurrences
The company released its 2023 performance forecast: The company expects to achieve net profit of 250-284 million yuan for the full year of 2023, an increase of 10%-25% over the previous year; net profit without deduction of 218-247 million yuan, an increase of 10%-25% over the previous year. The corresponding basic earnings per share were 0.49-0.56 yuan/share.
Benefiting from increased nuclear power valve deliveries, Q4 performance achieved steady growth in 2023, and the company expects net profit to mother of 250-284 million yuan, of which Q4 achieved net profit to mother of 0.49-83 million yuan in a single quarter, an increase of 0.56%-70.9% over the previous year. Net profit excluding non-return to mother is estimated to be RMB 2.18-247 million, of which net profit without deduction of RMB 0.39-0.69 million was achieved in Q4 in a single quarter, corresponding to a year-on-year increase of 10.54%-93.78%. Among them, the increase in performance was mainly due to the continuous increase in new nuclear power projects, the company fully benefited as a major supplier of nuclear power ball valves and butterfly valves, and the increase in nuclear power valve deliveries during the reporting period. Furthermore, by strengthening budget management and implementing management measures such as increasing revenue and expenses, reducing costs and increasing efficiency, the company has improved operating efficiency and promoted the continuous growth of business performance.
Nuclear power orders have been steadily fulfilled, and fund-raising production capacity has been released in an orderly manner
In terms of nuclear power and military business, following the approval of 4 nuclear power units for the Zhejiang Jinqimen and Guangdong Taipingling nuclear power projects on December 29, 2023, the number of nuclear power approvals in 2023 was the same as in 2022. According to the company's research announcement, the company mainly delivered orders for new construction units in 2020 (4 units approved for the whole year), 2021 (5 units approved for the whole year), and a small number of new units in 2022 (10 units approved throughout the year). According to the nuclear power plant construction cycle, in 2024, the company is expected to deliver new unit orders from 2021 to 2023. The company is a leading domestic nuclear power valve and has a strong competitive advantage in the field of butterfly valves and ball valves. The bid winning rate in the past ten years is over 90%. A single nuclear power unit company can receive an order amount of about 70 million yuan, and the corresponding business is expected to maintain steady growth. In terms of emerging business, in the hydrogen energy sector, as of mid-2023, the company is the only manufacturer of 70MPa vehicle pressure relief valves that have passed the domestic tripartite inspection. It has now passed internal testing with core customers, and some products have already been exported abroad; vacuum valves, ultra-clean valves, etc. in the semiconductor sector have also entered the prototype testing and verification stage; it is expected that performance will gradually be released in the future. In terms of production capacity, the company's equipment for the Wuxi flange fundraising project has been commissioned and put into operation one after another; the main project of the second phase of the spent fuel post-processing project has also been completed. It is expected that all construction content of the project will be completed and put into production as scheduled. The company's new production capacity will be released in an orderly manner and will produce expected benefits.
Investment advice and profit forecasting
The company is a domestic special valve provider. With the support of steady growth in traditional business and opening up space for emerging businesses, the company's performance is expected to achieve steady growth. We expect the company to achieve revenue of 21.00/25.04/3.087 billion yuan in 2023-2025, net profit to mother of 2.66/3.47/460 million yuan, EPS of 0.52/0.68/0.91 yuan/share, corresponding PE of 15.89/12.20/9.20 times, maintaining a “buy” rating.
Risk warning
Industry policy risk, risk of increased industry competition, risk of profits falling short of expectations, risk of raw material price fluctuations