Incident: The company released its 2023 annual report. In 2023, it achieved revenue of 1.23 billion yuan, an increase of 34.2% year on year; realized net profit of 140 million yuan, an increase of 78.1% year on year. Looking at the Q4 single quarter, we achieved revenue of 490 million yuan, up 23.4% year on year and 62.0% month on month; realized net profit of 100 million yuan, up 1.5% year on year and 396.7% month on month. Results grew rapidly in 2023.
We continue to be deeply involved in the aerospace and industrial machinery fields, and our business scale is growing rapidly. By product, in 2023, the company's 3D printing customized products, 3D printing equipment, and 3D printing raw materials business revenue was 6.3 billion yuan, 5.3 billion yuan, and 60 million yuan respectively, up 34.5%, 26.5%, and 99.0% year-on-year respectively. By industry, in 2023, the company's aviation sector achieved revenue of 690 million yuan, an increase of 8.3% over the previous year, accounting for 56.0%; the industrial machinery sector's revenue was 460 million yuan, an increase of 91.4% over the previous year, accounting for 37.3%. The company continues to be deeply involved in the aerospace field, continuously exploring new markets and new application areas. As of 2023, the company has more than 440 additive manufacturing equipment, a cumulative total of more than 1,610 lasers, and more than 120 related analysis and testing equipment. It is the largest industrialization base for metal additive manufacturing in China.
The overall cost control effect is remarkable, and the increase in outsourced processing and depreciation disrupts gross profit margins. In 2023, the company's fee rate for the period was 37.0%, -13.4pp. The year-on-year decline was mainly due to a decrease in share payments and management expenses of -31.7% compared to the same period; the fee rate for the Q4 single quarter was 26.3%, -8.4pp, and -15.5pp month-on-month.
In 2023, the company's gross profit margin and net profit margin were 49.0%, 11.5%, -5.6pp, and +2.8pp; in the Q4 quarter, gross profit margin and net margin were 52.4% and 21.0%, respectively, -3.7pp, -4.5pp, and +7.9pp, and +14.2pp. The decline in gross margin was mainly due to a significant increase in external processing and depreciation expenses.
Focus on continuous innovation in R&D; fund-raising projects are carried out in an orderly manner. Currently, the company's R&D personnel account for about 30%. In 2023, the company invested about 200 million yuan in R&D, an increase of 24.5% over the previous year. In 2023, the company took the lead in launching a platform solution for large-format equipment in the industry, and successively launched various products such as BLT-S615, BLT-S800, and BLT-S1500, covering various 5/6/8/10/20/26 laser solutions. In September 2023, the company announced the “2022 A-share Offering Instructions for Specific Targets”. It plans to invest about 2.5 billion yuan to build a high-quality metal 3D printing raw material powder production line and an efficient and high-precision metal 3D printing customized product production line. After completion, the project will greatly increase the production capacity of the company's customized metal additive products and raw material powder. On March 15, 2024, the company held a commencement ceremony for the Company's Phase III plot C and plot D. So far, construction of all the plots of the Company's Phase III project has started.
Profit forecasting and investment advice. The company's net profit to mother for 2024-2026 is estimated to be 3.2, 4.9 billion yuan, and 70 million yuan, respectively, corresponding EPS of 1.64, 2.53, and 3.63 yuan, corresponding to the current share price PE of 49, 32, and 22 times. The compound net profit growth rate for the next three years will be 71%. The company is a leading domestic metal additive manufacturing leader. The “material+equipment+service” integrated layout gave the company 60 times PE in 2024, the corresponding PEG was 0.85, and the target price was 98.40 yuan. For the first time, coverage was given, and a “buy” rating was given.
Risk warning: Risks such as reliance on imports for key core devices, concentrated downstream customer areas, and insufficient progress in fund-raising projects.