occurrences
On March 14, China Drone released its 2023 annual report. In 2023, the company achieved revenue of 2,663 billion yuan, a year-on-year decrease of 3.94%; net profit to mother was 305 million yuan, a year-on-year decrease of 18.27%.
reviews
1. The decline in revenue from products related to drone systems led to a year-on-year decline in revenue. In 2023, the company achieved revenue of 2,663 billion yuan, a year-on-year decrease of 3.94%. Among them, revenue from drone systems and related products was 2,558 billion yuan, down 6.24% year on year; revenue from drone technology services was 106 million yuan, up 136.37% year on year.
2. Changes in market demand and product delivery structure led to a decline in gross margin. In 2023, the company achieved a comprehensive gross profit margin of 18.95%, a year-on-year decrease of 5.32pcts, mainly due to market demand and different product delivery structures this year. In 2023, the company's cost ratio for the period was 7.24%, down 2.12 pcts year on year. Among them, sales, management, R&D and finance expenses rates were 0.75%, 3.5%, 6.48%, and -3.49%, respectively. The sales and management expenses ratio remained stable. The R&D expenses rate decreased 0.34 pcts year on year, and the financial expenses ratio decreased 1.80 pcts year on year. In 2023, the company's net profit to mother reached 303 million yuan, a year-on-year decrease of 18.27%.
3. Optimistic about the company's domestic business volume. The Pterosaur series drones have now developed platforms such as Pterosaur-1, Pterosaur-1D, Pterosaur-2D, Pterosaur-2H, and Pterosaur-3. They have fully autonomous multiple control modes, multiple complex reconnaissance methods, multiple payload weapon integration, accurate reconnaissance and strike capabilities, and comprehensive and flexible support and support capabilities, and have been widely used in many domestic and foreign users and scenarios. The company is increasing its domestic market expansion. Along with increasing demand in the domestic market, the future growth rate of the company's domestic business may exceed that of the military trade market, driving the company's performance growth.
4. Profit forecast and investment rating: We expect the company's net profit to be 3.60, 4.33, and 529 million yuan respectively in 2024-2026, up 19%, 20%, and 22% year-on-year. Corresponding to the current stock price PE, it is 74, 62, and 51 times, respectively, giving it an “increase in holdings” rating.
Risk warning:
Military orders fell short of expectations; military price reductions exceeded market expectations; market expansion fell short of expectations, etc.