occurrences
The company released its 2023 annual report: in 2023, the company achieved revenue of 671 million yuan, a year-on-year increase of 6.34%; the company achieved net profit attributable to mother for the full year of 2023 of 108 million yuan, an increase of 16.72% over the previous year; and realized net profit of 60 million yuan without return to mother, an increase of 27.60% over the previous year. In the fourth quarter, the company achieved revenue of 198 million yuan, a year-on-year decrease of 8.54%, and realized net profit of 40 million yuan to mother, a year-on-year decrease of 5.81%.
The growth rate of 2023H1 was higher than that of H2. Domestic regions and distribution models contributed mainly to revenue growth of 1.57/1.54/1.62/198 million yuan in Q1-Q4 in 2023, with year-on-year changes of 34.17%/6.67%/5.83%/-8.54%, respectively. In terms of growth drivers, sales of digital oscilloscope products equipped with the company's self-developed core technology platform accounted for 76.03% of digital oscilloscopes in 2023, an increase of 5.64 pcts over the previous year, continuing to drive revenue growth. By region, the company's domestic revenue in 2023 contributed 122.5% of the main business growth. By channel, the 2023 distribution model contributed 110.7% of the main business growth.
Gross margin benefited from improvements in high-end products. In terms of high investment in R&D to guarantee core competitiveness and profitability, the company's gross margin in 2023 was 56.45%, up 4.06 pcts year on year. Among them, the gross profit margin of digital oscilloscope products for the full year of 2023 was 58.26%, up 3.31 pcts year on year, mainly driven significantly by the gross margin of high-end and self-developed core technology platform products. In terms of period expenses, the company's sales/management/finance rate in 2023 was 15.75%/9.5%/-0.30%, with year-on-year increases and decreases of -0.89/-0.74/+1.69/pcts respectively. Among them, changes in financial rates were mainly due to a decrease in exchange gains and losses. The company's R&D rate during the same period was 21.30%, an increase of 1.38 pcts over the same period, providing a guarantee for the company's core competitiveness.
The self-developed platform continues to improve the product matrix, and the production side is expected to promote R&D and global layout of new products. In 2023, the company will continue to make efforts in high-bandwidth (DS80000 series) and portable (DHO series) digital oscilloscopes to enrich the product matrix and continue to help replace domestic products. In 2024, it is expected that new heavyweight products will be launched in multiple electronic measuring instrument product lines based on the existing core technology platform, providing a strong guarantee for the company's performance growth. On the production side, in 2024, the company will promote the construction of the Shanghai R&D Center Industrial Field Measuring Instrument Industrial Park to promote research and development of new products related to modular instruments and platform-based software technology; at the same time, the company will promote the construction of a Malaysian production base to improve the global supply chain system.
Investment advice and profit forecasting
The company is a scarce target with self-developed chipsets with digital oscilloscopes. We are optimistic about the company's long-term development. The company is expected to achieve revenue of 8.69/11.19/1,418 billion yuan in 2024-2026, net profit to mother of 1.53/2.20/265 million yuan, EPS of 0.83/1.19/1.43 yuan/share, corresponding PE is 44.36/30.97/25.62 times, maintaining a “buy” rating.
Risk warning
Risk of product sales falling short of expectations, risk of fluctuations in raw material prices, risk of exchange rate fluctuations