Incidents:

The company announced its 2023 annual report. In 2023, the company achieved operating income of 47.075 billion yuan, an increase of 13.08%; achieved net profit attributable to shareholders of listed companies of 3,506 billion yuan, an increase of 52.04% year on year; and diluted earnings per share was 0.42 yuan/share, up 55.56% year on year.

Comment:

Performance growth is in line with expectations, and profitability has improved

The company's operating performance grew rapidly in 2023. During the reporting period, it achieved revenue of 47.075 billion yuan, up 13.08% year on year, of which overseas revenue was 17.905 billion yuan, up 79.20% year on year, and the share of overseas revenue further increased to 38.04%, a record high. During the reporting period, the company achieved net profit of 3.506 billion yuan, an increase of 52.04% over the previous year. In terms of profitability, the company's gross profit margin and net profit margin were 27.54% and 8.01% respectively in 2023, up 5.71 and 2.28 pcts respectively from '22. The company's average return on net assets in 2023 was 6.31%, up 2.18pct from '22.

Sharing development results with investors, the proposed cash dividend exceeds 2.7 billion yuan. Since its listing, the company has accumulated more than 25 dividends and the dividend amount has exceeded 235 billion yuan, exceeding the amount of money raised by the company from the stock market. The overall historical dividend rate is about 42%. In addition, the company has continued to carry out large-scale share repurchases over the past 5 years, with a total repurchase amount of nearly 4.8 billion yuan. In 2023, the company plans to once again distribute a cash dividend of 3.20 yuan (tax included) to all shareholders for every 10 shares. The total amount exceeds 2.7 billion yuan, and the dividend rate is as high as 80%.

Profit forecasting

Under a neutral scenario, we expect the company to achieve revenue of 558.06, 667.40, and 77.542 billion yuan in 2024-2026; net profit to mother of 44.58, 58.99, and 7.270 billion yuan; EPS of 0.51, 0.68, and 0.84 yuan/share, respectively, corresponding to 15.98, 12.08, and 9.80 times PE. Maintain the company's “gain” rating.

Risk warning

Market competition risk, exchange rate fluctuation risk, raw material price fluctuation risk, downstream demand change risk, international situation change risk.