Performance exceeded expectations, and overseas markets performed well
The company's revenue for the full year of 2023 was 2,321 billion yuan, up 25.8% year on year, and net profit to mother was 318 million yuan, up 21.1% year on year. Among them, Q4 revenue was 582 million yuan and net profit to mother was 82 million yuan, up 16.79% and 12.58% year on year respectively. The company's performance slightly exceeded expectations, mainly benefiting from the rapid expansion of overseas markets and an increase in revenue share.
The company focuses on the field of high-end CNC machine tools, with a rich product matrix and leading manpower efficiency. Considering that the domestic machine tool industry is still in a downward range, we slightly lowered the company's profit forecast for 2024-2025 and added a profit forecast for 2026. The company's net profit for 2024-2026 is 3.87/4.60/544 million yuan (value before 2024-2025), corresponding to EPS of 1.18/1.41/1.66 yuan. The current stock price corresponds to PE 16.9/14.2/12.0 times. Maintain a “buy” rating.
Profit margins fluctuated slightly, and R&D investment continued to increase
For the full year of 2023, the company achieved gross profit margin of 26.5%, a year-on-year decrease of 1.03pct; net profit margin was 13.7%, a year-on-year decrease of 0.52 pcts. The company's rate improved during the period. The 2023 sales rate/management rate/finance rate were 6.93%/1.65%/0.17%, respectively, -0.05/-0.28/+0.15pct. R&D investment continued to increase. In 2023, R&D investment was 102 million yuan, an increase of 24.2% over the previous year.
Actively expand overseas markets, raise capital projects to increase production capacity, and continue to benefit from the rapid expansion of overseas markets, improved sales networks, and products have been sold to more than 40 countries and regions around the world.
In 2023, overseas revenue was 705 million yuan, up 113% year on year; revenue accounted for 30.4%, +12.4 pct year on year.
Furthermore, the gross profit margin of overseas regions is 31.35%, which is significantly higher than the domestic level. The increase in overseas share is expected to drive the company's overall gross margin growth. The production capacity of the company's fund-raising projects continues to expand. The third phase of the high-end CNC machine tool industrialization project is progressing smoothly. It is expected to be fully put into operation in 2024, and production capacity is expected to increase dramatically. In addition, the fourth phase of the high-end intelligent CNC equipment and core functional components project, which the company cooperated with the Suzhou Science and Technology City Management Committee, officially started on January 12, 2024. We believe that after the company's fund-raising and cooperation projects are delivered, it is expected to further increase production capacity and core component production capacity, seize domestic replacement opportunities for high-end CNC machine tools, and continue to benefit from the autonomy and control of industrial parent machines.
Risk warning: downstream demand falls short of expectations; fund-raising and production expansion falls short of expectations; international situation and geopolitical risks.