Incident: The company released its 2023 annual report, achieving revenue of 6.210 billion yuan (+3.16%) and net profit of 750 million yuan (+35.11%) for the full year of 2023. Looking at a single quarter, 23Q4 achieved revenue of 1,007 billion yuan (-23.37%) and net profit of 155 million yuan (+36.67%) to mother.
The revenue side for the full year was generally in line with expectations, and Q4 was slightly lower than expected due to revenue confirmation. The company's revenue in '23 was 6.210 billion yuan (+3.16%), focusing on major customers and strategic cooperation, continuously increasing investment in new markets, new fields and key customers to expand resources, and strengthening product application promotion in commercial aerospace, optoelectronics, high-speed interconnection, new energy, microwave components, etc. The 23Q4 single quarter's revenue was 1.07 billion yuan (-23.37%), or due to revenue recognition issues (inventory increased by 269 million at the end of 23Q4 compared to the end of 23Q3), and is expected to return to rapid growth as industry demand gradually recovers.
The net profit side was in line with expectations, and the cost control results were remarkable. In '23, the company achieved net profit of 750 million yuan (+35.11%), and the profit growth rate was significantly higher than revenue. The net interest rate was 13.98% (+3.16pct), of which: gross margin increased to 37.99% (+4.99pct), mainly due to the company's adoption of design optimization, process cost reduction, procurement cost reduction, energy consumption control measures, etc., and the efficiency of cost control was obvious; the period cost ratio was 22.14% (+1.48pct), mainly due to: ① Increased variable management expenses and amortization of equity incentive expenses led to a management expense ratio of +0.63 pct. ② Focus on advantageous professionals to actively lay out new industries and increase investment in key research projects. The R&D cost rate is the same Ratio +0.87pct. In 2024, the company plans to achieve operating income of 6.5 billion yuan (+4.67%), keep costs and expenses within 5.480 billion yuan, and continue to improve internal management and profitability.
Strong military products+ important breakthroughs have been made in key markets, and the results of measures such as cost reduction and efficiency are showing, which will lead to an increase in profitability, and the company's growth center is expected to move upward. Military products: As a leading military connector, the company covers all sub-fields, has a high market share in the aerospace and missile fields, and has fully benefited in the context of information technology construction and actual combat exercises. Consumer products: Looking at the medium to long term, the increase in the usage of 5G construction connectors+import substitution of high-end products. The company uses a large amount of new products and high added value, further expanding revenue and profit volume. In addition, the company has also achieved key breakthroughs in petroleum, optoelectronics and other markets, optimized industrial planning and layout, accelerated industrial upgrading, and continuously added new growth points. The first phase of the initial equity incentive plan launched in May 23 has been granted. The company is expected to continue to improve in internal management, R&D, production and marketing, which is expected to bring about a recovery and further increase in profitability, and the revenue and profit growth rate will reach a new level.
The revenue growth rate was adjusted according to the 23 annual report, and the 24-year EPS was reduced to 2.02 and 2.50 yuan (previous values were 2.21 and 2.83 yuan), and the 26-year EPS was added to 3.15 yuan. Referring to the comparable company's PE 26 times in 24 years, the target price was 52.52 yuan, and the target price was 52.52 yuan, maintaining the purchase rating.
Risk warning: Military orders and revenue recognition progress falls short of expectations; credit and asset impairment amounts are higher than expected