Incidents:
The company released its 2023 annual report. The 2023 revenue was 6.668 billion yuan, up 40.50% year on year; net profit to mother was 505 million yuan, up 78.15% year on year; after deducting non-net profit of 481 million yuan, an increase of 104.92% year on year. Among them, 2023Q4 net profit to mother was 171 million yuan, up 48.76% year on year; net profit after deducting non-return to mother was 159 million yuan, up 129.74% year on year.
Comment:
Seizing new energy and overseas market opportunities, the company achieved rapid growth in performance. By business segment, the company's revenue for dry-type transformers in '23 was 4,093 billion (YOY +25.23%); the complete series was 1.77 billion (YOY +59.81%); and energy storage was 414 million (YOY +546.95%). By region, the company's overseas revenue was 1,177 billion yuan (YOY +79.54%) and domestic revenue was 5.449 billion yuan (YOY +34.5%). By revenue sector, sales revenue from the new energy industry increased 68.21% year on year. Among them, sales revenue from the energy storage sector increased by 302.58% year on year, and sales revenue from the photovoltaic sector increased by 88.95% year on year. In terms of orders, the company's 23 orders were 7.832 billion (excluding tax, YOY +35.14%), of which the company's overseas orders in 2023 were 1,991 billion yuan (YOY +119.18%). The company seizes new energy and overseas market opportunities to drive rapid growth in the company's 23-year performance.
Actively promote the digital transformation of the industry, and further improve the company's profit level. The company's overall gross margin in 2023 was 22.81% (YOY+2.52pct) and net margin was 7.53% (YOY+1.56pct).
Among them, the company's Q4 gross margin was 24.45% (QoQ+1.67pct), the net margin was 8.96% (QoQ+1.45pct), and the company's profitability continued to improve. By sector, the main contribution to the improvement in the company's gross margin comes from the main business of companies such as dry-type transformers and complete electrical appliances. The dry transformation gross margin in 2023 was 26.98% (YOY+5.25pct), and the gross margin of complete electrical appliances was 17.74% (YoY+0.89pct). The company embraces new technology and continues digital transformation. It has completed the construction of digital factories in Haikou, Guilin and Wuhan in 23 years. With the digital factory being put into operation, digital manufacturing capabilities have been further improved, and operating costs have been effectively controlled. Coupled with falling material prices, an increase in the share of high-quality customers, an increase in gross sales margin, and a decrease in management expenses as a share of sales, further improving the company's profit level and operating performance.
The company's digital factory drives the digital transformation of the industry, and the company's digital business has great potential. The company takes its own digital factory as a model and actively undertakes digital solutions. The company signed a new digital overall solution business order in '23, with a total amount of 229 million yuan (tax included), and the total amount of digital factory total solution business orders has exceeded 600 million yuan. The digital business is expected to drive the transformation and development of the industry, and is also expected to become a new performance growth point for the company.
Actively expand into new business directions such as energy storage/hydrogen energy, and build a new energy digital manufacturing equipment supplier.
In terms of energy storage, on the one hand, the company produces supporting power equipment, and on the other hand, it has built a digital Jinpan energy storage plant, developed high-power electronic products such as high-power storage PCS, modular PCS, and intelligent high-voltage SVG, and independently developed industrial and commercial energy storage products, Jinyi Charging (CSP) charging pile platforms, and Smart all-in-one household energy storage machines. The company's new energy storage system orders in 2023 reached 641 million yuan (excluding tax), an increase of 144.87% over the previous year. In terms of hydrogen energy, the company lays out hydrogen rectifier transformers from electrolyzed water. From the 15th to the 15th five, the company strives to become an advantageous enterprise in the hydrogen energy industry centered on digital technology in the hydrogen energy industry with hydrogen production and hydrogen energy application as the main axis.
Profit forecast and investment rating: We expect the company's revenue for 2024-2026 to be 95, 123, and 15 billion yuan, respectively, up 43%, 29%, and 22% year-on-year; net profit to mother will be 8, 1.1, and 1.4 billion yuan, respectively, up 60%, 39%, and 26% year-on-year. Maintaining a “buy” rating
Risk factors: the risk of raw material price fluctuations, the penetration rate of high-pressure cascade solutions falls short of expectations, and increased market competition.