Incident: The company released its annual report. In 2023, the company achieved revenue of 36.4 billion yuan, a year-on-year increase of 13.67%, net profit to mother of 3.273 billion yuan, a year-on-year increase of 28.99%, net profit after deduction of 3,027 billion yuan, an increase of 50.13% over the previous year, and the performance maintained rapid growth exceeding expectations.
The fourth quarter performance was still impressive, and profitability continued to improve. Looking at a single quarter, 23Q4 achieved revenue of 9.16 billion yuan, an increase of 11% over the same period, and net profit to mother of 806 million yuan, an increase of 39.98%. In terms of profitability, the company's gross sales margin in 2023 was 22.05%, up 1.39 pct year on year, and the net sales margin was 9.53%, up 1.32 pct year on year. Looking at Q4 alone, the gross sales margin was 22.6%, up 1.26 pct from month to month, 2.8 pct higher, net sales margin 9.06%, slightly lower by 0.15 pct year on year, and up 1.75 pct from month to month.
The 10-meter-high stand is the highest in the world. International orders for coal mills are growing rapidly, and the spin-off and listing of Hengda Intelligent Control is progressing steadily. In 2023, the company achieved revenue of hydraulic supports and other coal machine equipment of 17.8 billion yuan, a year-on-year increase of 14.3%, a gross profit margin of 29.26%, and a year-on-year increase of 2 pcts. In 2023, the net profit of the coal machine sector was 3.19 billion yuan, up 25.3% year on year, and net profit to mother was 3.05 billion yuan, up 21.48% year on year. The increase in the profit level of the coal machine business and the rapid growth of the intelligent business led to a higher growth rate of business profit than the growth rate of revenue.
In 2023, the company won the bid and delivered the 10-meter super-high hydraulic bracket project in Caojiatan of Shaanxi Coal. The support height and working resistance of the 10-meter ultra-high mining intelligent hydraulic bracket are currently the highest in the world. In addition, the company also achieved breakthroughs in overseas business, winning bids for a number of complete projects in the international high-end market. The international market ordered 1,360 billion yuan throughout the year, an increase of more than 40% over the previous year. Furthermore, the company's subsidiary Hengda Intelligent Control is steadily advancing the spin-off and listing on the Shanghai Stock Exchange Science and Technology Innovation Board. It was accepted by the Shanghai Stock Exchange and entered the review stage in September 2023. Through this spin-off, the company will further focus on comprehensive coal mining equipment manufacturing and auto parts business.
Demand for road freight has picked up, ASIMCO has grown steadily, and a breakthrough has been achieved in air suspension systems for new energy vehicles. In 2023, ASIMCO achieved revenue of 4.24 billion yuan, an increase of 22.93% over the previous year, mainly due to the gradual decline in the impact of the 2023 epidemic, steady economic recovery, gradual recovery in road freight demand, and a recovery in the automobile market, which led to an increase in ASIMCO's overall revenue. Furthermore, in 2023, due to the completion of equity reforms in the auto parts division - ASIMCO, the company's goodwill generated by the acquisition of ASIMCO was reduced to the auto parts division - ASIMCO. The auto parts sector included planning to reduce the goodwill of ASIMCO Shanxi to prepare 44 million yuan for goodwill impairment.
In terms of new business, ASIMCO's revenue for NEV parts was 390 million yuan, a year-on-year growth rate of over 100%. The company made every effort to develop in the new energy vehicle market, successfully developed the main components of ASIMCO's smart air suspension system, completed the admission of potential suppliers to many leading OEMs, and reached simultaneous development plans with many customers. In 2023, ASIMCO Anhui will account for 22% of NEV revenue, covering mainstream NEV manufacturers; clarifying the direction of new business and new product development is expected to become a new driving force for ASIMCO's future growth.
SEG's performance has begun to gradually increase, and the restructuring and cost reduction and efficiency have achieved remarkable results. In 2023, SEG achieved revenue of 13.36 billion yuan, an increase of 12.55% over the previous year. Excluding exchange rate factors, it achieved revenue of 1.74 billion euros in 23, an increase of 4.01% over the previous year. This is mainly due to the good performance of the Indian and North American automobile markets in 23, and the industry recovered as the impact of the domestic epidemic gradually subsided. SEG2023 achieved net profit of 185 million yuan for the year, an increase of 2.4 times over the previous year, mainly due to the significant results of a series of measures to improve profitability, such as SEG business restructuring, cost reduction and efficiency.
The dividend ratio was further increased, and the high dividend value was highlighted. According to the company's annual report, the company's cash dividend reached 1.5 billion yuan in 2023, corresponding to a dividend ratio of 45.9% and a dividend rate of 6%, which is a further increase over 22. The high dividend shows the investment value.
Investment advice: We expect the company to achieve revenue of 393, 42.4, and 45.3 billion yuan respectively in 24-26, and achieve net profit of 39.79 billion yuan, 45.01, and 4.961 billion yuan, corresponding PE of 6.31/5.58/5.06 times, respectively, to maintain the “recommended” rating.
Risk warning: risk of downstream demand falling short of expectations, risk of coal price fluctuations, risk of delivery falling short of expectations, risk of raw material price fluctuations