Incidents:
On March 29, the company released its 2023 annual report. In 2023, it achieved operating income of 21,798,940,776 yuan, an increase of 20.88% over the previous year; realized net profit attributable to shareholders of the parent company of 3,105,703,645 yuan, an increase of 21.51% year on year; realized net profit from continuous operation of 3,150,093,955 yuan, an increase of 21.53% year on year.
The rail transit business is recovering steadily, and the company's position in the industry is stable:
China's railway construction recovered steadily in 2023. According to data disclosed by China Railway Group, China Railway completed fixed asset investment of 764.5 billion yuan in 2023, an increase of 7.5% over the previous year. The annual report revealed that in terms of rail transit business, the company made every effort to explore new products and markets; the CR450 completed high-speed performance tests, set multiple speed records, and successfully tested autonomous driving for domestic 20,000 ton heavy-duty trains, and pushed China's autonomous trains into the “fully autonomous era”; according to RT rail transit network statistics, the domestic market share of the company's urban rail traction system remained above 50% in 2023, leading the industry for 12 years. Permanent magnet traction gradually became mainstream in the industry, and the company's market share continued to advance; maintenance and overseas business continued to advance Maintenance revenue has increased dramatically, and many overseas orders have been received in Asia, Europe and America; in terms of rail construction machinery, catch-net work vehicles received batch orders for China Railway Group's large ramp vehicle project; the communication signal business continued to advance, and the urban rail signal business won the bid for 5 lines throughout the year, reaching a record high. Both FAO and the urban subway signal system achieved a breakthrough in the first order; in addition, key breakthroughs in power supply system integration have been achieved in the Chongqing subway, and the winning bid amount for the door sector business increased dramatically.
Emerging industries have broken through rapidly, and IGBT's market share continues to increase:
The annual report revealed that in 2023, the company's IGBT module delivery led the market share in rail transit and power grids, with a rapid breakthrough in the new energy market. According to NE era statistics, the company's installed capacity of new energy passenger vehicle power modules reached 12.5% in 2023, ranking third. The market share of centralized photovoltaic IGBT modules increased rapidly, and string modules achieved batch supply. The efficiency of ultra-fine groove 7.5-generation STMOS+ products improved significantly, reaching the leading international level, 5MW IGBT hydrogen power supplies helped the first 10,000-ton green-electric hydrogen production project in China successfully produce hydrogen. The third-generation 1200V SiC MOSFET chip reached the advanced level in the country, and the Yixing production line was rapidly progressing. The sales volume of new energy passenger vehicle electric drive systems continued to rise throughout the year. According to NE era statistics, 248,000 units were installed throughout the year, ranking in the top six in the industry, and received new orders from many high-quality customers such as BAIC and SAIC. It supported automakers to export more than 20,000 sets of overseas products to create an all-in-one product platform. 70-120kw product development; according to international energy network/photovoltaic headlines, the company's photovoltaic inverter business signed 18.6 GW of new domestic orders, rising to the top three for the first time. Mine truck electric drive systems, wind power converters, and central air conditioning converters continued to be delivered in batches and received new orders. Mine truck electric drives achieved a breakthrough in batch orders for large tonnage mining cards, and orders for medium pressure mills increased dramatically; the sensor business built 39 new production lines, production capacity continued to increase, and delivery volume increased dramatically. Domestic autonomous vehicle grade Hall ASIC chips passed AEC-Q100 certification; Outfit Prepare for multiple new orders from the domestic market, and the heavy duty deep-sea trenching equipment was successfully launched to fill the domestic gap.
Investment advice:
We expect the company's revenue from 2024 to 2026 to be 25.679 billion yuan, 30.096 billion yuan, and 35.212 billion yuan, respectively, and net profit to mother will be 3,575 billion yuan, 4.195 billion yuan, and 4.898 billion yuan respectively, giving 2024 22 times PE, and a target price of 55.54 yuan for 6 months, maintaining a “buy-A” investment rating.
Risk warning: downstream demand falls short of expectations; industry competition intensifies; product introduction progress falls short of expectations.