Incident Overview
The company released its 2023 annual report. In 2023, the company achieved operating income of 5.04 billion yuan, a year-on-year increase of 18.93%, and net profit of 641 million yuan, a year-on-year increase of 47.98%, net profit after deducting non-return to mother of 592 million yuan, a year-on-year increase of 60.88%, a gross profit margin of 35.35%, a year-on-year increase of 2.68%, and a year-on-year increase of 2.29 pcts.
According to estimates, in 23Q4, the company achieved operating income of 1,364 billion yuan, a year-on-year increase of 29.09%, a month-on-month increase of 1.49%, net profit of 163 million yuan, a year-on-year increase of 541.12%, a year-on-month decrease of 26.58%, a gross profit margin of 36.96%, a year-on-year increase of 0.69 pct, a year-on-year increase of 14.06%, a year-on-year increase of 12.28 pcts, and a year-on-month decrease of 4.39 pcts.
Revenue reached a record high in 23, and is expected to achieve another good result in 24
In 2023, the company's revenue reached 5.04 billion yuan, a year-on-year increase of 18.93%, a record high. The increase in revenue was mainly due to the recovery in the consumer and communications markets, and the company expanded smoothly in new fields such as new energy vehicles, photovoltaic energy storage, data centers and the Internet of Things. In 23, thanks to the recovery in overall operating rate and smooth development of new products, the company's profitability further improved, and gross margin increased by 2.35 pct to 35.35% in '23.
Looking ahead to '24, benefiting from the recovery of consumer electronics and the smooth expansion of new products, revenue reached a new high in January '24. It is expected that consumer electronics will recover further in the future, and the company is expected to achieve another good performance.
Continue to develop new businesses and inject new momentum into growth
1) Automotive electronics field: The company has been in the field of automotive electronics for many years. The depth and breadth of cooperation with major strategic customers continues to increase, and new projects for high-end customers continue to be promoted smoothly. The company's automotive electronics products are used in a wide range of fields, covering automotive battery management systems, intelligent driving systems, OBC, vehicle networking, headlight control systems, motor management systems, body control systems, smart cockpits, thermal management systems, etc. The automotive electronics business will lay a solid foundation for the company's long-term steady growth. 2) Photovoltaic energy storage: After years of deep cultivation, it has now been recognized by domestic and foreign industry benchmark enterprises. The company has successfully developed special new high-power components, continuously innovated products and technology, optimized business models, integrated resources, and prepared for the rapid development of the industry after breakthroughs. 3) Data center: AI development challenges inductive components for power management. The company's products can continue to meet the growing needs of high-end customers and have been continuously recognized by high-end customers. The large-scale application of computing power is booming. Various electronic products related to information interaction, processing, and calculation will bring a huge incremental market and new application scenarios to the company, which is expected to become an important driving force for the company's growth in the future.
Investment advice
Considering that the company continues to release new products but there is still uncertainty about the overall macro, we expect the company's net profit to be 9.5/12.27/1,561 billion yuan for 2024/2025/2026, respectively (previously 24/25 profit forecast was RMB 1,06/1.292 billion yuan). According to the 2024/2/29 closing price, PE was 23.3/18/14.2 times, maintaining a “buy” rating.
Risk warning
New production capacity falls short of expectations, downstream demand falls short of expectations, risk of insufficient funding for project construction in a timely manner, and risk of fluctuations in the surrounding environment.