According to the company's performance report, in '23, the company achieved revenue of 2,326 billion yuan, +26% year on year, net profit to mother of 320 million yuan, +22% year on year, net profit after deducting non-return to mother of 276 million yuan, +25% year-on-year. In 2023, while improving product performance, the company implemented fine management, strictly controlled material procurement, product design and various expenses, and continuously improved product competitiveness.

Revenue growth has been steady, and Q4 profit margins have increased to a certain extent. Among them, 23Q4 revenue was 587 million yuan, +18% year on year, net profit to mother was 84 million yuan, +14% year over year, and net margin increased to 14.3%. The company's gross margin level remained above 26% in the first three quarters of '23. The gross margin level for the whole year is expected to continue the trend of the first three quarters, and overall profit remains stable.

Overseas share has increased, helping domestic machine tools go global. According to the company's 23rd mid-year report, the company set up a special overseas sales network this year, selling products to more than 40 countries or regions. The company actively explores overseas markets, increasing its share of overseas revenue, and maintaining a high overseas profit margin, maintaining good growth in the company's business performance. It is a leading enterprise in the global layout of domestic machine tool companies, promoting the import and export of CNC machine tools.

Profit forecasting and investment advice. We believe that Neway CNC, as a leading company in the machine tool industry, is expected to usher in a phase of simultaneous upward growth in performance and valuation during the macroeconomic recovery period. The company's net profit for 23-25 years is expected to be 3.20/3.94/476 million yuan, respectively, giving the company a PE valuation of 25 times over 24 years, corresponding to a value of 30.14 yuan/share, maintaining a “buy” rating.

Risk warning. The risk of macroeconomic fluctuations; the risk of uncertainty in the external environment; the risk of industry and market competition, etc.