Revenue continued to grow steadily, with a high increase in Q4 after deducting non-net profit. In 2023, the company achieved operating income of 22.43 billion yuan, +11.3% of the year after adjustment, net profit of 3.52 billion yuan, +12.1% of net profit after adjustment, net profit of 3.50 billion yuan, +31.8% year-on-year, EPS was 1.86 yuan/share, and plans to pay 10 yuan 8.35 yuan (tax included); of these, Q4 had revenue of 5.38 billion yuan, +16.3% year-on-year, net profit of 770 million yuan, net profit of 770 million yuan year-on-year, net profit of 790 million yuan compared to the previous year Land repurchase compensation during the same period contributed to asset disposal proceeds.
Gypsum board continued to be steady, and the two wing businesses expanded at an accelerated pace, and “gypsum board+” bucked the trend and grew dramatically. By product: 1) Gypsum board revenue was 13.77 billion yuan, or +3.0%, accounting for 61.4%; gypsum board sales volume was 2.172 billion square meters, showing strong growth toughness in the context of demand pressure. Combined with falling raw fuel prices and reduced unit consumption, profitability rebounded markedly. We estimated gypsum board sales unit price 6.34 yuan/square meter, -0.7% YoY, unit cost 3.9 yuan/square meter, -6.1% YoY gross margin, +3.5pp; 2) Light steel keel revenue 2.29 billion yuan, -9.1% YoY, accounting for 10.2%, gross profit margin 18.7%, year-on-year -0.2pp, overall profit was relatively stable; 3) The waterproof membrane, waterproofing engineering and coating business achieved revenue of 2.79 billion yuan/450 million yuan/970 million yuan respectively, +29.0%/-1.1%/+22.4% YoY, with gross margins of 18.7%/7.1%/29.2% respectively. The two wings accelerated expansion, and profit showed a recovery increase; 4) Revenue from other products was 2.17 billion yuan, +150.0% YoY, accounting for 9.7% The collaborative advantages of benefiting from channels continued to be realized, and “gypsum board+” bucked the trend and grew dramatically.
Expense control has been optimized, cash flow continues to be excellent, and dividend ratio has increased. The comprehensive gross profit margin for 2023 was 30.0%, +0.64pp year on year, and the cost ratio for the period was 12.5%, and -1.31pp. Among them, sales/management/finance/R&D expenses ratio was +0.43pp/ -1.51 pp/ -0.15pp/ -0.08pp year on year. Expense control was continuously strengthened, and the management expense ratio was clearly optimized, and the net profit ratio was 15.9%, which was basically the same year on year. In 2023, the company achieved net operating cash flow of 4.73 billion yuan, +29.2% year over year, including 2.77 billion yuan in Q4, +28.3% year over year. Cash flow performance continued to be excellent. At the same time, the company formulated the “Double Improvement of Quality and Return” action plan, operated steadily, and shared development results with investors, and increased the dividend ratio to 40% in 2023.
Risk warning: Real estate demand falls short of expectations; raw material growth falls short of expectations; business development integration falls short of expectations; investment suggestions: the main business focuses on consumption transformation, improves the energy growth of the two wings, maintains the “buy” rating company as a leading gypsum board company, and actively promotes the “integrated two wings, global layout” strategy. The market share of the main gypsum board industry will continue to increase, and the expansion of waterproofing, coatings and “gypsum board+” will accelerate. Currently, the joint restructuring of the Gabrielle Coatings Wing has been registered and included in the scope of the merger on February 29.
Earlier, the company announced the 2023 equity incentive plan. The performance assessment goals exceeded expectations, demonstrating the company's confidence in future development. EPS is expected to be 2.50/3.07/3.35 yuan/share in 24-26, respectively, and the corresponding PE is 11.1/9.0/8.3x, maintaining a “buy” rating.