Incident: The company released its 2023 performance report. In 2023, the company achieved operating income of 1,504 billion yuan, +22.54% year over year; net profit to mother was 173 million yuan, +40.73% year over year; non-net profit deducted from mother was 151 million yuan, +33.05% year over year.
Key points of investment:
Our performance has increased dramatically in 23 years, accurately grasped the market, and actively developed at home and abroad. In 2023, the company achieved operating income of 1,504 billion yuan, an increase of 22.54% year on year; realized net profit attributable to owners of the parent company was 173 million yuan, an increase of 40.73% year on year; net profit after deducting non-recurring profit and loss was 151 million yuan, an increase of 33.05% year on year. The reason for the sharp increase in performance is mainly due to the company seizing market opportunities and actively exploring domestic and foreign markets. The revenue scale of various business segments has increased steadily, and overall sales performance has improved, thus driving a significant increase in profit levels this year compared to the previous year. In addition, a combination of factors such as an increase in the company's wealth management income also contributed to a large increase in net profit. It is expected that in the future, with the steady growth of the company's various business segments, the performance is expected to continue to improve.
Overseas semiconductor and new energy businesses are developing rapidly and are actively participating in the international core supply chain. From 2020 to 2022, the 3-year CAGR growth rate of the company's overseas revenue was close to 50%, and new orders in '23 accounted for 15% to 20% overseas. Customers are distributed in Southeast Asia, Europe, etc., and plans are to expand North America and strengthen the European and Middle Eastern markets in the future. It has now been certified by many international manufacturers, such as semiconductor chips and new energy photovoltaic manufacturers. These advantages are expected to help the company develop overseas and accelerate its entry into the business of other international manufacturers.
Production capacity has been released simultaneously at home and abroad, and revenue from consumables replacement has gradually increased. In terms of production capacity, the second phase of the company's domestic Nanjing plant expansion project has already started. It is expected to be put into operation in Q1 in 2024. After full production, production capacity can reach 1.5 times the current production capacity of the Nanjing plant, meeting business growth needs from 2024 to 2025. Overseas, Malaysia's production capacity increased to 50 million yuan, and two new plants were purchased. It is expected that production will be put into operation in Q1 in 2024, and the total production capacity will increase to 200 million yuan, mainly serving the growth of overseas orders for the semiconductor and new energy industries. Furthermore, consumables replacement revenue increased from 5% to 28%, and is expected to continue growing in the future. It is expected that the increase in the share of overseas orders and consumables will drive up gross margin.
Profit forecast: According to the company's 23-year performance report, we have made corresponding adjustments. We forecast that the company's revenue for 2023-2025 will be 15.04 billion yuan, 19.61, and 2,418 billion yuan (previous values were 14.14, 19.61, and 2,418 billion yuan); net profit to mother for 2023-2025 will be 1.73, 2.32, and 286 million yuan (previous values were 1.84, 2.60, and 322 million yuan), respectively, and the corresponding PE is 26.14, 19.46, and 15.79 times, respectively. Based on the company and comparable company conditions, the 2024 PE valuation was given 24 times, and the target price was 41.45 yuan/share, maintaining the “buy” rating.
Risk warning: Risk of fluctuations in the downstream semiconductor industry; risk of capacity release falling short of expectations; risk of iterative technology upgrades; risk of information delays or untimely updates of public data used in research reports.