occurrences
On March 16, China Aviation Optoelectronics released its 2023 annual report. In 2023, the company achieved revenue of 20.074 billion yuan, a year-on-year increase of 26.75%, and achieved net profit of 3.339 billion yuan, an increase of 22.86% over the previous year.
reviews
1. In 2023, the company achieved operating income of 20.074 billion yuan, a year-on-year increase of 26.75%, and achieved net profit of 3.339 billion yuan, an increase of 22.86% over the previous year. The performance continued to grow rapidly. The company's overall gross margin was 37.95%, up 1.41 percentage points year on year, and profitability was further strengthened; management expenses reached 1.33 billion, up 46.52% year on year due to an increase in equity incentive amortization; R&D expenses reached 2.197 billion, up 37.55% year on year, and R&D investment remained above 10% of revenue.
2. The company focuses on connecting the main business, speeding up the market layout, and achieving new breakthroughs in market expansion.
Driven by the development of downstream NEVs, data centers, etc., the global connector industry is expected to maintain a growth rate of 6%, and the company's revenue growth rate is faster than the industry's growth rate. Among them, market expansion in the defense sector has achieved new breakthroughs, the preferred position of interconnection solution suppliers continues to be consolidated, and comprehensive competitiveness is steadily improving; high-end civilian manufacturing businesses focus on strategic emerging industries, communication and industrial business operation quality and efficiency, and achieve rapid growth in data centers, petroleum equipment, photovoltaic energy storage and other fields; the NEV business focuses on “world-class, domestic mainstream” customers, and mainstream vehicle companies continue to have coverage Upgrading, multiple projects have been targeted throughout the year; the international layout continues to accelerate, the “big customer+region” market development model has been implemented, and the supporting role of global platforms has gradually become apparent.
3. Industrialization capacity is steadily improving. The company accelerated the promotion of modern industrial capacity building. The basic device industrial park (1) project was successfully completed, the South China Industrial Base (Phase I) began a new high-end manufacturing journey, the high-end interconnection technology industry community, civil aircraft and industrial interconnection industrial park was fully started, the Shenyang Xinghua Aero Engine Wire Harness and Small Fan Production Capacity Improvement Project Comprehensive Assembly Support Center and Taixing Aviation Optoelectronic Liquid Cooling Source Series Product Integrated System Project was successfully capped.
4. Various business areas have great market potential, and the company increased its “14th Five-Year Plan” development goals.
According to the overall market development situation and strategic business development direction, the company added the established development goals and further clarified the “five modernizations” development strategy of “specialized development, group operation, capitalized operation, international development, and precise control”. In 2024, with “steady growth, sustainable and high-quality development” as the main purpose, the company will adhere to strategic focus, focus on the main business, step up the expansion of new industries, promote the implementation of future industrial layout, and create a “second growth curve”. According to the company's financial budget, the company plans to achieve operating income of 22.1 billion yuan in 2024, an increase of 10.09% over the previous year; the total planned profit is 4.110 billion yuan, an increase of 10.08% over the previous year.
5. Profit forecast and investment rating: We expect the company's net profit to be 41.17, 49.90, and 5.846 billion yuan respectively in 2024-2026, up 23%, 21%, and 17% year-on-year. Corresponding to the current stock price PE is 19, 15, and 13 times, respectively, covered for the first time, and given a “buy” rating.
Risk warning:
The industry's growth rate is slowing; industry competition is intensifying; the company's business expansion falls short of expectations.