Description of the event
On March 28, the company released its 2023 annual report, disclosing that the company achieved operating income of 1,040 million yuan in 2023, an increase of 24.25% over the previous year, and net profit to mother of 141 million yuan, an increase of 27.34% over the previous year.
The company made progress in R&D, innovation and market expansion in 2023. Facing a complex and changing internal and external environment, the company has always focused on main business development and core technology research and development, continuously strengthening capacity building and ensuring smooth product delivery.
In terms of R&D innovation, the company has completed scientific research tests on multi-type products and overcome many technical problems. A total of 12 products were transferred from scientific research to mass production. Through pre-research and bidding, 25 more research projects were added compared to the end of the previous period; nearly 50 pre-research projects were under way at the end of the period, and several projects achieved phased results; key technology projects have overcome many technical problems. Major breakthroughs have been made in key technology research such as next-generation high-energy insensitive propellants and castable hydroxyl liners.
In terms of market expansion, in the field of ammunition and equipment, the company's development of main combat model products such as 2005/XF and 2303/JK has achieved phased results and has entered the bidding stage. In the aerospace field, high-fuel-speed power module products and drone boosters have been delivered in large quantities; multiple medium- and large-caliber series power module products have been added; next-generation high-energy insensitive propellant formulations have been successfully tested; and intelligent control products such as ignition control and combat unit security for Type 4 missile engines have been expanded.
Investment advice
The company's net profit for 2024-2026 is estimated to be 188 million yuan, 245 million yuan, and 297 million yuan respectively, with year-on-year growth rates of 33.5%, 30.2%, and 21.4%. The corresponding PE was 40.89 times, 31.41 times, and 25.87 times, respectively. Maintain a “buy” rating.
Risk warning
The release of production capacity for fund-raising projects is slow, and downstream demand falls short of expectations.