Brief performance review
On March 29, 2024, the company disclosed its annual report. In 2023, the company achieved revenue of 21.8 billion yuan, an increase of 21%; net profit attributable to mother was 3.1 billion yuan, an increase of 22%; net profit after deducting non-return to mother was 2.6 billion yuan, an increase of 30%. Among them, Q4 achieved revenue of 7.7 billion yuan, an increase of 8%; net profit attributable to mother of 1.1 billion yuan, an increase of 6%; after deducting non-net profit of 900 million yuan, an increase of 6%.
Management analysis
By product, the company's rail transit business revenue in 2023 was 12.9 billion yuan, up 2%, and revenue from emerging equipment business was 8.7 billion yuan, up 70%. Among them, power semiconductor revenue was 3.1 billion yuan, up 69%; sensor business revenue was 600 million yuan, up 45%; electric drive systems for new energy vehicles were 1.9 billion yuan, up 75%; industrial conversion revenue was 2.4 billion yuan, up 74%. Times Semiconductor's revenue reached 3.6 billion yuan, an increase of 60%, and net profit of 1 billion yuan, an increase of 149%, accounting for 33% of net profit.
In terms of profitability, the gross margin of the company's rail transit business increased by 2 pct to 38% in 2023, and the gross margin of the emerging equipment business increased by 2.5 pct to 28%, driving the company's comprehensive gross margin to increase by 1 pct to 33.9%. Due to the increase in preparation costs for product quality assurance, the company's sales rate increased by 1 pct. The company's comprehensive net interest rate remained unchanged.
Power semiconductor business: In 2023, the company's installed capacity of new energy passenger vehicle power modules reached 1.01 million sets, with a market share of 12.5%, ranking third; the market share of photovoltaic IGBT modules increased rapidly. The third-generation 1200V SiC MOSFET chip has reached the advanced level in China. The semiconductor phase III project is progressing rapidly, and the Yixing production line has completed the main project capping.
Sensors: The company has built 39 new production lines, and domestic autonomous vehicle grade Hall ASIC chips have passed AEC-Q100 certification.
New energy passenger vehicle electric drives: Installed capacity reached 250,000 units in 2023, with a 49% increase, ranking in the top six in the industry. It won many new high-quality customers such as BAIC and SAIC Motor, and exported 20,000 units overseas.
Industrial converter: As the only state-owned enterprise in the inverter market, the company has outstanding advantages in technology, products and industrial chain. The number of new domestic orders reached 18.6 GW, ranking third in the industry.
Profit Forecasts, Valuations, and Ratings
The company's rail transit business is expected to benefit from the equipment renewal cycle. The company's net profit from 2024 to 2026 is estimated to be 37, 4.4, 5.3 billion yuan, or 19%, up 19%, 20%. The current price of the company's stock is 18, 15, and 13 times the PE valuation, maintaining a “buy” rating.
Risk warning
Competition in the power semiconductor industry is intensifying, the penetration rate of new energy vehicles and photovoltaic wind power falls short of expectations, rail transit equipment falls short of expectations, and the risk that restricted shares will be lifted.