Incidents:
The company announced its 2023 performance forecast. According to the company's announcement, the company's revenue for 2023 is estimated to be 1,232 billion yuan (yoy +34.2%), net profit to mother is 148 million yuan (yoy +86.5%), and net profit after deducting non-return to mother is 102 million yuan (yoy +240.0%). The performance falls short of market expectations.
Comment:
The release of production capacity was compounded by the release of aerospace demand, and revenue continued to grow rapidly. According to the company's announcement, the company expects to achieve revenue of 1,232 billion yuan in 2023, an increase of 34.2% over the previous year. Our analysis believes that the main or affiliated companies will continue to deeply cultivate aerospace and other application fields, continuously explore new markets, release demand from multiple sectors, and expand the company's production capacity, driving rapid revenue growth.
Product restructuring affects profitability, and the increase in executive holdings shows confidence in long-term development. According to the company announcement, the company's equity incentive amortization expenses for 2021/2022/2023 were 175/1.69/89 million yuan respectively, and the adjusted net profit for 2021/2022/2023 was 121 million yuan (yoy +19.9%)/245 million yuan (yoy +101.8%)/237 million yuan (yoy -3.3%), respectively. The net interest rate was 22.1%/26.6%/19.2%, respectively. We analyzed that the decline in profitability was mainly due to the decline in profitability The product structure adjustment and superposition production process need to be further optimized. We expect that as the production process matures, the cost side is expected to be further controlled, and the company's profitability is expected to rise steadily in the future. According to the company's announcement, Mr. Xue Lei, the chairman and general manager of the company, plans to increase his shareholding in the company through his own capital or self-financing, demonstrating confidence in the company's long-term development.
Where metal additive manufacturing is scarce, it has the advantage of raising capital to expand production and expand scale. 1) The company provides customers with the design of customized metal 3D printing products and upstream localized 3D printing raw materials through its own equipment to solve the scarce targets of suppliers for comprehensive solutions in the field of metal additive manufacturing. 2) The company actively raises investment and production to break through production capacity bottlenecks, further expand order acceptance capacity and business scale, expand scale advantages, and enhance comprehensive strength; 3) The company focuses on the high-margin aerospace sector and continues to explore new markets and fields, and is expected to fully benefit from the release of downstream demand in the future.
The profit forecast was lowered and the “buy” rating was maintained. Considering that the company's new products are in the initial process optimization stage and the scale effect needs to be further strengthened, and combined with the amortization of equity incentives, we lowered our 2023-2025E gross margin forecast for 3D printing customized products and technical services to 50.2%/51.1%/52.6% (previous value was 60.0%/63.5%/64.5%), and lowered the 2023-2025E net profit forecast to RMB 148/311/503 million yuan (previous value was 2.51/4.14/589 million yuan), The current stock price corresponds to PE 102/49/30 times, respectively. Using Huashu Hi-Tech (3D printing equipment and product services), Huaqin Technology (special functional materials), aviation technology (aero engine and gas turbine parts), and Guangqi Technology (next-generation metamaterials), which are related to high-end aerospace manufacturing and new materials, as comparable companies, we selected the ratio of 2024E price-earnings ratio to 2023E-2025E net profit CAGR. The average PEG of the company was 1.0. The company's PEG was 0.6, which was lower than the industry average. Considering that the company is a scarce target for metal additive manufacturing, downstream demand is being released at an accelerated pace, and performance is expected to maintain a rapid growth rate, so it maintains a “buy” rating.
Risk warning: Increased competition in the field of metal additive manufacturing; risk of profit fluctuations due to equipment procurement system reform; risk of dependence on imports for key core components of additive manufacturing equipment.