Incident: The company released its 2023 annual report. In 2023, it achieved revenue of 2.89 billion yuan, +10.9% year on year; net profit to mother of 200 million yuan, +8.4% year over year; net profit after deducting non-return to mother of 170 million, +78.9% year on year. Looking at a single quarter, Q4 achieved revenue of 930 million yuan, -1.9% year-on-month, and +26.4% month-on-month; net profit to mother of 70 million yuan, -8.9% year-on-year, and -8.3% month-on-month.
The optimization of the business structure, and the increase in gross margin of the core and large proportion of the measurement business+reliability environmental testing business led to an increase in the company's overall gross margin. In 2023, the company's comprehensive gross margin was 42.3%, +2.6pp year on year. The increase in gross margin was mainly due to the gross margin increase of 4.2pp in the measurement business of the advantage sector, and the gross margin of the environmental reliability test business increased by 2.8 pp; the net interest rate decline was mainly due to changes in the company's fair value. Net profit decreased by about 40 million over the same period last year, putting pressure on the short term; the management expense ratio for the 2023 period was 32.3%, which was basically flat year-on-year, with a slight increase of 0.4 pp; among them, sales, management, R&D and finance expenses They were 14.3%, 7.3%, 10.1%, and 0.6%, respectively. The R&D expenses rate remained the same year on year, and the sales, management, R&D, and finance cost ratios were -0.04pp, +0.5pp, +0.02pp, and -0.12pp, respectively. Looking at 2023Q4 alone, the company's gross margin was 42.2%, -0.6pp year on year, -1.3pp; net margin was 8.5%, -3.9 pp year on year, -1.5pp month on month; the cost ratio for the period was 26.3%, +0.5pp year on month.
Key industries with advantages such as metrology services, integrated circuit testing, and aerospace have grown steadily, driving the company's performance improvement.
Facing the relatively weak downstream of the inspection industry in 2023, the company actively adjusted its business strategy, continuously optimized its business structure, and achieved steady growth in multiple businesses: continuous breakthroughs in major customer development in the measurement business, achieving revenue of 720 million yuan, +18.8% year over year; reliability and environmental testing achieved revenue of 660 million, +8.2% year-on-year, and won bids for large-scale aviation test projects, continuing to strengthen its leading position in the industry; the scale of the automotive semiconductor business in the integrated circuit testing and analysis business achieved industry-leading scale, large-scale integrated circuit test systems were put into use, and high-end complex chip testing capabilities A breakthrough was achieved, and the wafer manufacturing process analysis capability was at the forefront of the industry, achieving overall revenue of 200 million yuan, +34.2% year over year; electromagnetic compatibility testing business was 330 million, +11.3% year over year; chemical analysis business was 170 million, +12.2% year over year. In addition, due to the company's appropriate contraction of the loss-making sector, food testing, environmental testing, and EHS evaluation business revenue was -14.5%, -9.6%, and -10.8%, respectively.
Continue to deepen the diversified strategic layout and drive the company's growth with multiple engines. The company is a third-party measurement and testing service agency approved by many quality supervision departments, environmental protection departments, food and drug administration departments, and other government departments, research institutes, and large enterprises. It has an in-depth layout in special industries, automobiles, aerospace, communications, rail transit, electricity, shipping, petrochemicals, pharmaceuticals, environmental protection, food and other industries: in special industries, the volume of business cooperation with key major customers is steadily increasing; in the automotive industry, it has established an inspection standard system and public service platform covering the entire life cycle of new energy vehicles to support the product innovation of many well-known manufacturers at home and abroad; in the communications industry It has been shortlisted for large-scale IoT testing and certification projects and has maintained in-depth cooperation with key major customers; in the power industry, business development in the nuclear power field has achieved results and actively developed drone forensic training service services for power grid systems; in the aviation industry, it has built a joint laboratory for large aircraft reliability with important partners to stabilize the foundation of forensic and verification business cooperation for multiple models; as the company continues to expand in multiple industries, there is plenty of room for future growth.
Profit forecasting and investment advice. The company's net profit from 2024-2026 is estimated to be 350 million yuan, 4.5 billion yuan, and 570 million yuan, respectively. The compound net profit growth rate for the next three years is 42%, maintaining a “holding” rating.
Risk warning: Risk of credibility and brand being affected by adverse events, risk of changes in policies and industry standards, risk of new laboratory capacity falling short of expectations.