Profit increased 61% year over year in 2023, capital expenditure increased in 2024:
In 2023, the company achieved revenue of RMB 7.252 billion, up 24% year on year; net profit attributable to company owners was RMB 521 million, up 61% year on year. Basic profit per share was 52.7 cents, with a dividend of HK$0.28 per share (equivalent to RMB 0.258, with a dividend ratio of approximately 49%). The company's performance growth performance is good. The decline in the dividend ratio is mainly due to the increase in capital expenditure in 2024. The subsequent dividend ratio is expected to remain at least 50% of earnings per share. The company's capital expenditure in 2024 was approximately RMB 670 million, of which the electric AMI business capital expenditure was RMB 150 million, mainly for the construction of the new phase of the plant in Mexico and the construction of the Hungarian factory; the capital expenditure for the communications and fluid AMI business was RMB 130 million; and the capital expenditure for the ADO business was RMB 390 million, mainly for the construction of intelligent production lines for energy storage and capital expenses for the construction of the Mexican factory.
Ongoing orders are plentiful, and overseas business continues to grow at a high rate:
By the end of 2023, the company's on-hand orders were approximately RMB 7.9 billion, +30% compared to the end of 2022, and 80% will be delivered within one year. By business, the electronic AMI business is RMB 2.6 billion, the telecommunications AMI business is RMB 3.5 billion, and the ADO business is RMB 1.8 billion. The company's overseas market share remains stable. Of the 7.9 billion on-hand orders, 2.5 billion is overseas business (including 1.2 billion for electricity, 1.2 billion for telecommunications and 100 million for ADO). Overseas revenue is expected to grow by 30% or more in 24 years, with the Mexican market +50% and other markets +15%. The Hungarian plant is expected to be put into operation in July-August '24, and revenue will contribute in the fourth quarter. Overall, the high growth rate of the overseas business continued from 24 to 25; at the same time, after the ADO business put into operation an intelligent energy storage production line, revenue growth will accelerate, leading to an increase in gross margin, and the company's overall performance growth momentum will improve.
Net interest rate and ROE continued to rise, maintaining the buying rating, and raising the target price to HK$7.88:
In '23, the company's net interest rate increased 1.8 percentage points to 10.5%; ROE increased 3.7 percentage points to 14.7%, and the increase in profitability will help raise the company's valuation level. We raised the company's target price to HK$7.88, equivalent to 10 times and 7.4 times and PE in 2024 and 2025. The target price has room for a 46% increase from the current price, maintaining the buy rating.