Incident: The company released its 2023 annual report, and achieved revenue of 7.17 billion yuan in 2023, an increase of 7.9% over the previous year; net profit to mother was 1.61 billion yuan, an increase of 34.3% over the previous year. Looking at the Q4 single quarter, we achieved revenue of 1.86 billion yuan, up 1.8% year on year and 5.6% month on month; net profit to mother was 4.4 billion yuan, up 34.0% year on year, up 12.5% month on month.
Demand for tire abrasives is improving, and revenue is growing steadily; raw materials and exchange rates have changed, and gross margin has increased dramatically. In 2023, the overall domestic and foreign tire mold market improved, and the tire mold business increased 15.8% year on year, driving the company's total revenue to increase 7.9% year on year. In 2023, the company's comprehensive gross margin was 34.7%, an increase of 6.6 percentage points over the previous year, mainly due to exchange rate changes, lower raw material prices, and improved operating efficiency. In the 2023Q4 quarter, the company's consolidated gross margin was 36.4%, an increase of 6.3 percentage points over the previous year.
The expense ratio increased slightly during the period, and the net interest rate maintained steady growth. The fee rate for the 2023 period was 8.4%, an increase of 1.4 percentage points over the previous year, mainly due to increased R&D investment and exchange rate changes affecting exchange earnings; the Q4 single quarter was 8.2%, down 1.7 percentage points year on year and 1.9 percentage points month on month. Net interest rate in 2023 was 22.5%, up 4.4 percentage points year on year; Q4 single quarter was 23.8%, up 5.7 percentage points year on year and 1.5 percentage points month on month. The increase in the company's net profit margin is mainly due to an increase in gross margin.
Tire mold leaders continue to lay out in overseas markets; CNC machine tools focus on efforts, and there is plenty of room for growth. The company's tire mold is the single champion product in the national manufacturing industry. It is positioned in the middle and high-end markets. It continues to promote the international production capacity layout. The tire mold project was expanded in Thailand and put into use in October 2023. Furthermore, the company started construction of a Mexican factory and set up a service organization in Cambodia, forming a relatively complete global production service system.
CNC machine tools began to be sold abroad in 2022, and continued to develop and launch a variety of products in 2023. Series products such as 5-axis laser machining centers for superhard tools and composite machining centers for turning and milling appeared on the market one after another.
In 2023, the company's CNC machine tool business achieved revenue of 310 million yuan, an increase of 111.8% over the previous year.
Profit forecasting and investment advice. The company's net profit for 2024-2026 is estimated to be 1.76 billion yuan, 19.0 billion yuan, and 2.11 billion yuan, respectively. The compound net profit growth rate for the next three years is 9.3%, covered for the first time, giving it a “holding” rating.
Risk warning: risk of fluctuations in raw material prices, risk of increased industry competition, risk of exchange rate fluctuations.