Description of the event
The company released its 2023 performance report. In 23, the company achieved revenue of 357 million yuan, -19.90%; net profit to mother of 84 million yuan, or -45.80% year-on-year; net profit after deducting non-return to mother of 77 million yuan, or -39.31% year-on-year.
Looking at a single quarter, 23Q4 revenue was $103 million, +1.73% YoY, +24.98%; net profit to mother was $0.12 billion, or -57.23% YoY, or -46.58%; net profit without return to mother was $11 million, or -51.19% YoY and -47.38% YoY.
Incident comments
The year-on-year growth rate of the company's revenue was corrected for the first time in six quarters, and demand is gradually picking up. Although overall demand for terminals in the downstream 3C electronics and semiconductor industry was under relative pressure in '23, marginal improvements have been made. According to the National Bureau of Statistics, domestic industrial robots were 42,000 units/set in December 2023, +3.4% year-on-year, and the growth rate was corrected; the cumulative output from January to December was 430,000 units/set, -2.2% year-on-year, and the decline narrowed. According to MIR, 2023Q4 domestic industrial robots sold 76,000 sets, +2% year-on-year, of which the small six-axis robot sold 26,000 sets, +7% year-on-year; the sales volume of collaborative robots was 80,000 sets, +34% year-on-year.
Looking ahead, demand for industrial robots is expected to usher in an upward cycle, and the rapid development of lightweight robots such as collaborative robots will further drive demand for harmonic reducers.
Mechatronics continues to be promoted, and products in the transmission industry chain continue to be enriched. The company continues to increase investment in R&D and domestic and foreign expansion:
1) In terms of high-precision CNC turntables, the company combines the different application scenarios of downstream customers to continuously enrich product size, improve product performance, and meet the needs of end customers. 2) In terms of mechatronic actuators, the company expands and explores product functions in different application fields, covering many emerging scenarios and further expanding the downstream product market. In the second half of 2023, the company pioneered a liquid-controlled grinding device based on innovation in technologies such as miniature electro-hydraulic servos, and completed test applications in multiple application scenarios. In addition, the company relies on the transmission industry chain to develop a forward-looking layout around intelligent robots and high-end equipment, and continues to iterate on harmonic reducer technology and derivative products to raise product barriers.
The industrialization of humanoid robots is progressing steadily, which is expected to open up room for growth. Recently, Tesla's humanoid robot released Gen-2, posted several Gen-2 walking videos, and continued to post recruitment information to the outside world, recruiting data collection supervisors and data collectors, AR/VR software engineers, manufacturing engineers, etc., or indicating that Tesla's hardware solutions are improving and are actively promoting brain optimization and preparing for subsequent mass production. Currently, harmonic reducers are T-chain deterministic solutions, and subsequent mass production releases will bring greater demand elasticity for harmonic reducers. The company is a domestic leader in harmonic speed reducers. It has cost advantages, technical advantages and production capacity advantages. Combined with the channel advantages of strategic cooperation with Sanhua Intelligent Control, it is expected to enter the supply chain of leading global humanoid robot companies and domestic manufacturers, and open up room for growth.
Maintain a “buy” rating. In the future, the company will gradually improve its layout from core components to functional components. Combining key technologies such as mechanics, electricity, and fluids, increasing product technical barriers and adding rich application scenarios, and humanoid robots, it is expected to achieve net profit of 1.20 and 226 million yuan from 2024-2025, corresponding to PE of 186x and 99x, respectively.
Risk warning
1. The risk that downstream demand falls short of expectations;
2. The risk of increased competition in the industry.