Description of the event
The company released its 2023 annual report, achieving full-year revenue of 20.074 billion yuan, a year-on-year increase of 26.75%, and achieved net profit of 3.339 billion yuan, a year-on-year growth rate of 22.86%; 2023Q4 achieved revenue of 4.715 billion yuan, a year-on-year growth rate of 39.34%, and achieved net profit of 446 million yuan, a year-on-year growth rate of 2.92%.
Incident comments
The company relies on continuous vertical integration in the defense field and horizontal expansion of the civilian product category to ensure steady revenue growth. The “cost engineering” continues to be implemented, leading to a steady increase in the company's profits. The company's revenue increased year-on-year in 2023, mainly due to new breakthroughs in market expansion in the defense sector and continued consolidation of its preferred position as a supplier of interconnection solutions; new results in the civil sector communications and industrial business operations; rapid growth in data centers, petroleum equipment, photovoltaic energy storage, etc. The NEV business focused on “world-class, domestic mainstream” customers, and the coverage rate of mainstream car companies continued to increase, achieving multiple project targets throughout the year.
The company continues to advance the “cost efficiency project”, and the overall gross margin continued to rise to a record high throughout the year. There are certain fluctuations in quarterly gross margin due to the impact of the product delivery structure. The company's gross margin increased year-on-year for the full year of 2023, mainly due to the continuous advancement of the company's “cost efficiency project”, building a “two gold” refined full-process control model, continuing to promote strategic cost control, adhering to R&D source drive, and achieving cost control throughout the value chain. The company's quarterly gross margin fluctuated to a certain extent due to the impact of the product delivery structure, but the overall trend was upward.
Profit forecast and valuation: The company is expected to achieve net profit of 41.6, 525, and 6.63 billion yuan in 2024-2026, with year-on-year growth rates of 25%, 26%, and 26%, respectively. Corresponding to the market value on March 15, 2024, PE is 18, 14, and 11 times, respectively.
Risk warning
1. Demand is not issued in a timely manner;
2. The risk of production capacity expansion falling short of expectations.