The company released its 2023 annual report
The company released its 2023 annual report, and achieved revenue of 7.496 billion yuan (+22.86%); net profit to mother of 655 million yuan (+53.73%); net profit after deduction of 566 million yuan (+50.49%); basic earnings per share of 0.88 yuan (+54.39%); and weighted average return on net assets of 12.52%, (+3.37pct).
In terms of dividends, the company distributed 1.00 yuan (tax included) in cash to all shareholders for every 10 shares, for a total dividend of 76 million yuan this time.
The company's profit margin level continues to rise, overseas markets continue to develop, and the company's profitability continues to increase. The gross profit margin for the full year of 2023 was 25.56% (+2.14pct), and the net profit margin was 8.87% (+2.45pct). By industry, the share of revenue from industrial product sales increased from 79.64% in 2022 to 87.08%, and its gross margin was affected by refrigeration and compression demand in industrial industries such as LNG. The products are highly competitive, up 3.94 pcts from 2022. By region, the company deployed overseas markets earlier. As an established European and American brand, Dunham Bush products have a clear advantage in the centrifuge and screw machine markets. In recent years, the gross margin level of overseas business has always been higher than at home. In 2023, the overall gross margin level at home and abroad increased by 2.67 pct and 4.11 pct, respectively. The subsidiary continues to make breakthroughs in technology, equipment and overseas orders.
At the same time, we believe that the company's revenue and profits in overseas markets are expected to increase further in the future, thereby increasing the company's overall profit margin.
The cold chain industry continues to prosper, and the refrigeration boom continues to improve in the industrial and commercial sectors to accelerate the development of key technologies and equipment for low-carbon energy systems. In the cold chain sector: The national “14th Five-Year” Cold Chain Logistics Development Plan released in 2021 plans to build about 100 key cold chain logistics bases. As of 2023, 66 base construction lists have been released. There are still many construction projects in the next two years, and the boom in the prepared food industry will also drive the growth of the cold chain. In the industrial sector: The gradual refinement of policies related to large-scale equipment upgrading is expected to increase the demand in downstream petrochemical, chemical and other industries. The company has leading technical strength in the refrigeration and compression industry, and has a perfect layout in the fields of CCUS, hydrogen energy equipment, etc., and is expected to benefit from the explosion of the industry in the future.
Investment advice
We are optimistic about the long-term development of the industry and the company, but considering the slowdown in demand in downstream chemical and other industries since the fourth quarter of last year, we have drastically lowered the company's profit forecast: 2024-2026 operating income forecast to be 79.2/88.1/9.85 billion yuan (2024-2025 prior value was 101.0/12.04 billion yuan), and net profit to mother was adjusted to 6.89/7.88/897 million yuan (pre-2024-2025 value of 885/1,036 million yuan) to the current total share capital The diluted EPS calculated at 764 million shares was $0.90/1.03/1.18. The PE ratio corresponding to the current stock price is 13/11/10 times, maintaining a “buy” investment rating. Follow-up recommendations focus on the positive impact of the gradual implementation of domestic large-scale equipment renewal policies and rules on the industry.
Risk warning
1) Market fluctuation risk; 2) Raw material price fluctuation risk; 3) Exchange rate risk; 4) Accounts receivable recovery risk; 5) Loss of core technical personnel.