Incident: The company released its 2023 annual report. In 2023, it achieved operating income of 1,122 million yuan, +10.17% year-on-year, and realized net profit of 210 million yuan, or +18.05% year-on-year. Single Q4 achieved operating income of 247 million yuan, +0.44% year over month, and -26.86% month on month; realized net profit to mother of 0.28 million yuan, -14.21% year on year and -62.51% month on month. Results grew steadily throughout the year.
The company's profitability is gradually improving, and its product competitiveness is leading the industry. In 2023, the company's gross margin/net margin was 46.39%/17.93%, respectively, +0.24/+1.18pct, with a steady increase in profitability. The company invested 128 million yuan in R&D, +5.65% year-on-year, and the R&D expenditure ratio was 11.40%. The company has a perfect product ecosystem, quickly personalizes customers, and is highly competitive in the market.
The long-term potential market capacity of microgrids is huge, and there is great potential for future development. According to statistics from the State Grid, there are more than 2 million industrial and commercial users with a power supply voltage rating greater than or equal to 10 kV in China. If the average unit price of enterprise microgrid systems is 1 million yuan, the potential long-term market capacity will reach 2 trillion yuan. Currently, the penetration rate of enterprise microgrid systems is still low. Assuming a penetration rate of 40%, the market size will reach 800 billion yuan.
The company's microgrid products have excellent performance and leading R&D progress. The company's long-term high R&D investment supports the continuous iterative upgrading of the company's products. At present, three product upgrade stages have been completed. The latest EMS 3.0 products have been incorporated into the optical storage and charging platform on the basis of the previous 2.0, to truly achieve integrated flexible control of source network load storage and charging.
At present, EMS 3.0 has completed the product development framework, and test projects are already in operation.
Global demand is gradually spreading, and overseas business is growing rapidly. Energy supply prices and supply volumes have been unstable in recent years. Microgrids are gradually being popularized at home and abroad due to their low cost and high reliability advantages. In 2023, the company's sales and technical team went abroad several times to participate in industry exhibitions and established a good brand image. Overseas revenue increased 128.10% over the same period last year. Investment suggestions: We expect net profit to be 2.58/3.60/481 million yuan in 2024/2025/2026, corresponding to PE of 18.3/13.1/9.8x in 2024-2026, maintaining the “increase” rating.
Risk warning: PV installation falls short of expectations; market competition intensifies; technology research and development falls short of expectations