occurrences
The company announced its 2023 results, with operating income of 21.799 billion yuan, +20.88% year on year; net profit to mother was 3.106 billion yuan, +21.51% year over year; of these, rail transit equipment achieved revenue of 12.91 billion yuan, +2% year on year, and the emerging equipment business achieved revenue of 8.732 billion yuan, +69.64 year on year.
Key points of investment
Domestic railways have recovered, and revenue from rail transit equipment has been rising steadily. In 2023, China Railway completed fixed asset investment of 764.5 billion yuan, an increase of 7.5% over the previous year. The company seized the opportunity of China Railway Group's investment recovery in new mobile equipment and made every effort to explore new products and markets while ensuring product delivery and maintaining a stable market position. Rail transit equipment products achieved operating income of 12.91 billion yuan, an increase of 2% year on year, including 10.23 billion yuan for rail transit electrical equipment, +4.8% year on year; rail construction machinery, -1.1% year on year; communication signals of 659 million yuan, year on year + 0.4%; other rail transit equipment amounted to 334 million yuan, -37.1% year-on-year. In the context of the State Council actively promoting large-scale equipment renewal and the State Railway Administration promoting the elimination of old internal combustion locomotives, the company's rail transit equipment business is expected to fully benefit.
Emerging equipment has taken advantage of the trend and led the market share in many businesses. In 2023, the company's emerging equipment achieved revenue of 8.732 billion yuan, +69.64%, including power semiconductor devices of 3.108 billion, +69.39%; industrial conversion of 2,388 billion yuan, +73.75%; electric drive systems for new energy vehicles of 1.909 billion, +74.68% year on year; offshore equipment 733 million, +67.86% year on year; and 594 million yuan for sensor devices, +45.43% year on year. According to statistics, the company's passenger car power modules rank among the top three in the industry, with a market share of 12.5%; rail transit and power grid IGBT module market share is far ahead, with the highest share in the country; the photovoltaic inverter business signed 18.6 GW new domestic orders, rising to the top three; the installed volume ranking and market share of electric drive systems for new energy vehicles and the domestic market is growing rapidly, and the domestic market ranking is in the top six in the industry; sensor components rank first in the domestic market share in the rail transit sector, and the field of new energy vehicles, wind power, and photovoltaics.
Investment advice:
We expect the company's 2024-2026 net profit to be 35.7/40.7/4.62 billion yuan, maintaining a “buy” rating.
Risk warning:
Product development and technological innovation fell short of expectations; industry competition increased risks; product promotion fell short of expectations.