The company released its 2023 annual report: 2023 revenue of 7.802 billion yuan, up 2.00% year on year, net profit of 324 million yuan (660 million yuan in the same period last year); of these, Q4 revenue was 2,253 million yuan, up 0.57% year on year, and net profit to mother 180 million yuan (61 million yuan in the same period last year).
Multiple products and multiple scenarios have been developed, and the growth performance of the county is impressive. In 2023, the company's revenue was +2% year-on-year. During the real estate downturn, the company actively transformed and returned to positive growth through development of multiple products and multiple scenarios.
(1) By product, the growth rate of traditional hardware products with a high degree of real estate correlation was lower than the overall rate in 23 years (door and window hardware +0.90%, door and window accessories -3.55%). Construction products continued to shrink due to poor payment (point support curtain wall components -8.91%, stainless steel fence components -17.05%), household products +1.42%, door control hardware +6.37%, and other construction hardware +20.29%. (2) By market, domestic provincial capitals increased +2% year-on-year, prefecture-level cities -3%, counties +10% year-on-year, and overseas in 2023.
The profit level continues to improve, and the upward trend is clear. In 2023, the company's gross profit margin was 32.26%, +2.06% year over year, mainly due to lower raw material costs; single Q4 gross profit margin was 33.95%, +2.77pct year on year, +1.79pct month-on-month, and continued improvement. The cost rate for the 2023 period was 25.15%, -0.98pct year-on-year. The net interest rate returned to mother in 2023 was 4.15%, +3.30pct year on year. The net profit margin for the fourth quarter of a single quarter was 8.0%, and continued to increase significantly from the same period last month.
Repayments have remained steady, and the purchase amount has increased significantly. In 2023, the company's net operating cash flow was 499 million yuan, or 436 million yuan, mainly due to an increase in purchase cash to pay the upstream supply chain, and repayments remained steady; the revenue ratio was 108%, +9pct year on year, and the net current ratio was 154%.
Profit forecasting and investment advice. We expect the company's 2024-2026 net profit to be $53/72/90 million, respectively. According to the latest closing market value, PE is 22/16/13 times, respectively. Referring to comparable company valuations and company performance growth expectations, the company is judged to be 30 times the reasonable PE valuation in 2024, corresponding to the company's reasonable value of 49.35 yuan/share, maintaining a “buy” rating.
Risk warning. Downstream demand has declined, raw material prices have risen, and expectations for new categories to expand into new markets are low, etc.