Event: The company released its 2023 performance report. In 2023, the company achieved operating income of 357 million yuan, down 19.90% from the previous year; net profit to mother was 84.17 million yuan, down 45.80% from the previous year; net profit after deducting non-return to mother was 77.39 million yuan, down 39.31% from the previous year. Due to low demand in markets such as 3C electronic products and semiconductor industries in 2023, customer demand declined, fixed asset investment slowed, and demand for industrial robots was under pressure. Industrial robots are the company's main downstream industry, so the company's revenue declined in 2023. At the same time, the company increased investment in R&D and domestic and foreign expansion in 2023, and R&D expenses and sales expenses increased, leading to a sharp decline in the company's profit.
Harmonic reducer products continue to be iterated, and mechatronic technology covers many emerging scenarios. In 2023, the company will continue to increase investment in R&D, actively carry out R&D work to improve the performance of harmonic reducers such as weight reduction, high torque and high rigidity, optimize and iterate harmonic reducer products, and enhance the core competitiveness of the products. At the same time, the company's mechatronic technology and products have made great progress, and the size and performance of high-precision CNC turntable products have been enriched and optimized to meet the needs of end customers; in terms of integrated robot actuators, the company explored product functions in different fields and completed coverage of multiple emerging scenarios; 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 testing applications in multiple application scenarios.
Benefiting from the rapid development of intelligent robots, demand for core components such as harmonic speed reducers is expected to be released quickly. Intelligent robots place higher demands on core functional components such as speed reducers. The company has a wide variety of harmonic reducer products, including various series types such as LCS, LHS, N series and Y series. Among them, Y series products use a new structure and tooth design and use third-harmonic technology, which is ideal for use in application scenarios requiring extremely high transmission accuracy, strong carrying capacity, good system rigidity, and low output vibration.
In order to meet the strategy of intelligent robot development and internationalization, the company has strengthened its overseas layout since this year, set up an overseas headquarters in Singapore, set up an R&D and testing center in Germany, and plans to launch production capacity in Mexico. It is expected to gradually open up overseas markets and enter the global robot supply chain.
Profit forecasting and investment advice. We expect the company to achieve operating income of 3.57/5.72/828 million yuan in 2023-2025, and achieve net profit of 0.84 to 1.86 billion yuan. The current market value corresponds to 2023 PE of 264.1X. In the long run, the company is expected to benefit from the development of intelligent robots, achieve rapid scale expansion, and maintain an “gain” rating.
Risk warning: industry competition increases risk; risk of declining industry demand; risk of fluctuating raw material prices.