Event: On March 28, the company released its 2023 annual report. The company's main business revenue for the full year of 2023 reached 1.06 billion yuan, up 4.7% year on year, with a loss of 1.26 billion yuan, an increase of 270 million yuan over the previous year's loss; adjusted EBITDA was -52 billion yuan, narrower than the previous year's loss. The main business revenue for the second half of the year alone was 800 million yuan, an increase of 9.8% over the previous year.
In 2023, the company's traditional business product structure was adjusted, and the management fee ratio was reduced:
(1) Looking at revenue by business: ① Educational intelligent robots and intelligent robot solutions had annual revenue of 350 million yuan, up -32.8% year on year; ② logistics intelligent robots and intelligent robot solutions had annual revenue of 390 million yuan, up +47.9% year on year; ③ annual revenue of consumer robots and other hardware equipment was 250 million yuan, up +91.5% year on year; ④ customized intelligent robots and intelligent robot solutions for other industries (including humanoid robots) had annual revenue of 62.24 million yuan, up -24.5% year on year. In 2023, education/logistics/consumer/other industries accounted for 32.9%/36.9%/24%/5.9%, respectively. Compared with 2022, the change ratio was -18.3%/+10.8%/+10.9%/-2.3%, respectively.
(2) In 2023, the company's overall gross margin was 31.5%, down 7.9pct from 2022. The main reason was product restructuring, the increased share of logistics/consumer-grade business revenue, and relatively low gross margin. Referring to the 2023 semi-annual data, the gross margin for education/logistics/consumption/other industries was 35.2%/12.4%/16.3%/36.6%, respectively.
(3) In 2023, the company's sales expenses, management expenses, R&D expenses, and financial expenses were 5.1/4/4.9/0.1 billion yuan respectively, up +35.6%/-2.4%/+14.5%/+4400%, respectively. The main reason for the large increase in sales expenses was 90 million yuan in share payments and 40 million yuan in e-commerce promotion expenses.
The humanoid robot application scenario breaks the game:
In 2023, the company developed the industrial humanoid robot Walker S, which has now been piloted in the leading domestic NEV vehicle assembly line, pioneering the application of humanoid robots in industrial scenarios. In June 2023, the company signed a “Strategic Cooperation Framework Agreement” with Tianqi Co., Ltd. to promote the application of humanoid robots in industrial scenarios such as new energy vehicles, 3C electronics, and smart logistics. Tianqi Co., Ltd. is deeply involved in the automotive intelligent equipment business. Its main customers include well-known domestic and foreign automakers such as Ideal, Tesla, and BYD. It is expected to help the company implement humanoid robots in the field of intelligent manufacturing in the future.
Significant volume of logistics and consumer-grade businesses:
(1) In 2023, the company launched the Chitu L4 class unmanned logistics vehicle, which achieved a breakthrough from 0 to 1 in low-speed unmanned logistics vehicle products and opened up the boundaries of indoor and outdoor logistics scenarios; at the same time, the traditional product Wali T3000 towing and traction robot achieved mass production. Currently, the company has a rich product system such as AGV, AMR and L4 class unmanned logistics vehicles, which can be widely used in five major industries, including new energy vehicle manufacturers, tire production plants, 3C electronic equipment factories, battery production lines, and e-commerce.
(2) In 2023, the company launched the second-generation cat litter machine and Cyclone strong suction sweeper. The Borderless Smart Lawn Mower project is progressing smoothly, and the product performance is good. At the same time, the company has established a complete secondary distribution system, covering mainstream markets around the world, and is expected to further enter the global market with good product strength in the future.
Firmly invest in long-term R&D and build a technical moat:
In 2023, the company made significant progress in all three areas of robotics, artificial intelligence, and robot-artificial intelligence fusion technology. ① In terms of robotics technology, the company has developed a variety of servo drivers, and continues to improve operation/torque control technology and end-to-end gait planning algorithm research; ② in artificial intelligence technology, the company continues to break through in lightweight high-performance visual models, multi-modal fusion perception, and offline voice full-link interaction technology; ③ In terms of robot and artificial intelligence fusion technology, the company continues to upgrade its self-developed USLAM positioning and navigation system, which has realized the implementation of multi-modal language large model technology, so that robots can effectively improve multi-task decision-making and execution capabilities such as human-machine interaction. By the end of 2023, the company had the most effective patents for humanoid robots in the world. The total number of patents was more than 2,100, an increase of 31.25% over the end of 2022. Continued and efficient R&D investment has built a moat for the company in humanoid robot technology.
Profit forecast: Considering the pressure on the domestic economic environment, the industrialization of humanoid robots has yet to be accelerated. Based on the 2023 annual report already disclosed by the company, we lowered the company's profit forecast. The company's revenue for 2024-2026 is 17.1/25.1/3.90 billion yuan, respectively (the value before 2024-2025 was 22.8/3.74 billion yuan, respectively), up 62%/47%/55% year-on-year respectively; net profit is -6.2/4.7/0.3 billion yuan (values before 2024-2025 were -4.7/ 0.2 billion yuan).
According to the latest closing price, the corresponding PS is 50/34/22 times, respectively, maintaining the “gain” rating.
Risk warning events: humanoid robots fall short of expectations, risk of increased market competition, risk of profit forecasting assumptions falling short of expectations, etc.