Event: The company released its 2023 annual report. In 2023, the company achieved operating income of 3,630 billion yuan, +28.68% year on year; realized net profit of 209 million yuan, +9.34% year over year; net profit after deduction of 210 million yuan, +16.97% year on year. Among them, in Q4, Q4 achieved operating income of 1,112 billion yuan, +17.70% month-on-month; realized net profit of 44 million yuan, -9.11% year-on-year, and -41.61% month-on-month; net profit after deduction of 46 million yuan, +12.29% year-on-year and -34.69% month-on-month.
In '23, the company calculated that the long-term equity investment of the participating company Anhewei would be reduced by 5.2 million yuan.
23 The company's gross margin level has increased. The company's comprehensive gross margin and net margin in 2023 were 22.34%/5.99%, respectively, +2.26pct/-0.81pct. Among them, Q4 gross margin and net margin were 24.61%/4.45%, respectively, +5.93pct/-1.74pct year-on-year, and +0.14pct/-3.77pct month-on-month.
The main reasons for the increase in the company's gross margin were internal cost reduction and efficiency and the reduction in raw material costs.
New energy products continue to gain strength, increase overseas layout, and expand product types. The company's revenue for energy, lighting and other products in '23 was 26.27/8.12/192 million yuan, +42.32%/-4.60%/+54.04% year-on-year.
New energy products achieved revenue of 2.26 billion yuan in 23 years, +66.64% year-on-year, of which sales revenue of step-up transformers has exceeded 1 billion yuan. In terms of sales, the company has further expanded its overseas layout and has successfully supplied major overseas customers directly. In terms of products, the company has completed the expansion of new energy product categories such as photovoltaic smart box-type substations and all-in-one computers, laying the foundation for subsequent growth.
Increase production capacity at home and abroad, build and put into operation production bases in Malaysia, and actively prepare production bases in Anhui and Mexico. The company actively expanded the production capacity of new energy products, invested in the construction of a production base in Shouxian County, Anhui in '23, and further iteratively upgraded on the basis of the former Jiangxi digital factory. The project is expected to be put into operation in the first half of '24. The company's production base in Malaysia was built and put into operation in '23, making it the company's first overseas factory; the company planned a production base for new energy products in Mexico to better promote the company to develop new customers in the North American market. The project is undergoing preliminary work and planning for land acquisition.
Investment advice: The company's net profit for 24-26 is expected to be $308/3.93/468 million yuan, respectively, +47.3%/+27.3%/+19.1% year-on-year, corresponding to PE of 18.1/14.2/11.9, maintaining a “buy” rating.
Risk warning: The growth rate of the new energy industry is declining; the expansion of new customers falls short of expectations; the progress of production expansion falls short of expectations.