Description of the event
The company released its 2023 annual report. It achieved full-year revenue of 2,117 billion yuan, an increase of 17.26%; realized net profit of 314 million yuan, an increase of 16.44%; and realized net profit of non-return to mother of 280 million yuan, an increase of 17.08%.
Incident reviews
Testing services and equipment sales contributed mainly to growth. By sector, revenue from testing services, equipment sales, integrated circuit verification and analysis services, and other businesses achieved revenue of 10.03, 7.53, 2.57, and 105 million yuan, respectively, with year-on-year growth rates of 19.45%, 23.00%, 2.34%, and 1.57%, respectively.
In terms of profitability, the company's gross margin in 2023 was 45.6%, down 1.06 pct year on year, net profit margin 17.42%, up 0.16 pct year on year. By sector, the gross profit margin of test equipment was 32.76%, down 1.01% year on year; the gross profit margin of environmental and reliability testing services was 58.80%, up 1.85% year on year; and the gross profit margin of integrated circuit verification and analysis services was 43.28%, down 13.80% year on year.
Deeply cultivate industry segments and accelerate the expansion of new fields. The company continues to increase test capacity building for environmental and reliability, integrated circuit verification and analysis, electromagnetic compatibility, etc., continuously supplementing special laboratory testing requirements, and accelerating the expansion of application fields such as new energy, energy storage, aerospace, communications, medical devices, etc.; through the construction of special laboratories in Mianyang and Guizhou, the company has begun a strategy of going out to build a laboratory in Thailand to refine the test service network and enhance the scale effect of the enterprise.
Production capacity continues to be released. Shanghai Yite's equipment is expected to be basically ready and installation and commissioning completed in the second quarter, and production capacity will begin to be released one after another. At the same time, the company is speeding up the construction of the NEV product testing center expansion project and the fifth-generation mobile communication performance testing technology service platform project, which is expected to be officially put into operation in the second half of 2024.
Profit forecasting and valuation
The company's revenue for 2024-2026 is estimated to be 25.35, 30.06, and 3.528 billion, with year-on-year growth rates of 19.74%, 18.60%, and 17.36%; net profit to mother is 3.87, 4.77, and 581 million yuan, with year-on-year growth rates of 23.19%, 23.12%, and 21.78%. The company's 2024-2026 performance corresponds to 19.05, 15.47, and 12.70 times PE, respectively. Growth is outstanding, and the current valuation already has a strong cost performance ratio compared to future growth centers, and has been raised to a “buy” rating.
Risk warning:
Policy risk; risk that expansion into emerging fields falls short of expectations.