Event: The company publishes its 2023 annual report. During the reporting period, the company achieved revenue of 5.751 billion yuan, +13.24% year-on-year. Net profit attributable to mother was 627 million yuan, +15.46% year on year, net profit after deducting non-return to mother was 623 million yuan, up 17.77% year on year. Net operating cash flow was $1,233 million, +74% year over year.
Basic earnings per share were 0.75 yuan/share, +12% year over year.
Technological innovation leads enterprise development and pursues quality to create a “brand champion”. The company insists on scientific and technological innovation as the lead and continues to increase R&D investment. In 2023, it invested 563 million yuan in R&D, accounting for an average of more than 10% for many years. The number of R&D personnel reached 1,159, accounting for more than 33% of the total number. At the same time, the company is strengthening strategic and forward-looking technology research. Overall, 12 scientific and technological achievements are at the leading international level, 2 have reached the international leading level for similar products, and actively participated in national key research and development plans. The company's brand value is increasing, and it has won many honors such as “2023 Beijing Top 100 High-Precision Enterprises”, “2023 Typical Case of Digital Transformation of Listed Chinese Companies”, and “2023 Beijing-Tianjin Wing Top 100 Manufacturing Enterprises”.
Actively implementing green development, many outstanding achievements. With the mission of “making electricity safer, smarter, more efficient and cleaner”, the company incorporates ESG concepts into enterprise construction, and has outstanding performance in multiple dimensions. In terms of environmental performance, 2.5 million yuan was invested in environmental protection, and the use of green electricity accounts for 6%. In terms of social performance, total tax payments reached 490 million yuan, charitable donations reached 6.75 million yuan, and outstanding performance in terms of economic performance. It won bids for various projects such as China's first 10 million kilowatt-class Kubuqi Shagohuang project and the State Grid's first 500kV secondary optimization demonstration project. The business development trend is good, and the market share is stable at the forefront of the industry.
Focus on shareholder returns to share results and control expenses to promote steady development. The company continues to strengthen the importance of shareholder returns and fully protect the legitimate rights and interests of shareholders. Since its 14 years of listing, the company has paid continuous dividends and accumulated dividends of more than 3.4 billion yuan, with a dividend financing ratio of 180%. Of these, it plans to distribute 500 million yuan in cash dividends in 2023, and 0.6 yuan per share, accounting for 80% of net profit attributable to mother. The company's sales, management, R&D, and financial expense ratios were 8.33%, 4.83%, 9.41%, and -1.00%, respectively. The year-on-year changes were -0.03pct, +0.45pct, +1.03pct, and +0.06pct, respectively. Equity incentives led to an increase in the management expense ratio, and the overall cost control level was good, which is conducive to the steady development of the company.
Investment advice: We expect the company to achieve revenue of 66.36/76.56/8.822 billion yuan in 2024-2026, net profit to mother of 723/8.41/980 million yuan, EPS of 0.87/1.01/1.18 yuan, and PE of 18.31/15.74/13.51 times respectively, maintaining the “recommended” rating.
Risk warning: The macroeconomy falls short of expectations, R&D progress falls short of expectations, and market demand falls short of expectations.