Company announcement: In 2023, revenue, net profit to mother, and net profit after deducting non-net profit were 17.906 million yuan, 4.26 million yuan, and 398 million yuan, respectively, up 2.07%, 11.84%, and 17.72% year-on-year respectively. Among them, Q4 revenue in 2023, net profit attributable to mother, and net profit after deducting non-net profit were 47.61 billion yuan, 1.16, and 103 million yuan respectively, up 12.62%, 1.88%, and 6.20% year-on-year respectively.
Stable business performance. In 2023, revenue, net profit to mother, and net profit after deducting non-net profit were 17.906 million yuan, 4.26 billion yuan, and 398 million yuan respectively, up 2.07%, 11.84%, and 17.72% year-on-year respectively. Among them, Q4 revenue in 2023, net profit to mother, and net profit after deducting non-net profit were 47.61 billion yuan, 1.16, and 103 million yuan respectively, up 12.62%, 1.88%, and 6.20% year-on-year respectively. The overall operation is stable, and the quality of the reports is relatively healthy.
Shipments of aluminum wires have increased in the enameled wire business, and shipments of new energy flat wires have increased. In 2023, the enameled wire business achieved revenue of 12.66 billion yuan, up 4.7% year on year, accounting for 70.69% of revenue, gross margin of 6.90%, up 0.46 pct year on year. Among them, in the past few years, the home appliance industry has generally begun to switch to enameled aluminum wire. The company's aluminum wire business has grown rapidly and its share has increased. The company also plans to expand production capacity of 40,000 tons of aluminum-based electromagnetic wires. In 2023, the company sold about 24,000 tons of flat wire products, of which the flat wire for new energy vehicles sold more than 17,000 tons, an increase of 43% over the previous year. The automotive and electronic wire business achieved revenue of 2.96 billion yuan in 2023, a year-on-year decrease of 6.71%, and gross margin of 2.53%, a slight year-on-year decline.
Special wires may benefit from the major development of AI, and the superconducting companies they invest in have broad future prospects. Hengfeng Special Conductors, a subsidiary of the listed company holding 80.68% of the shares, is a leading specialty conductor company. Special conductors such as silver plated, tin plated, and nickel plated are in a leading position in China, and have significant technical advantages and market advantages. The development of the aerospace industry and the advancement of 5G and data center construction, especially the future transformation of using copper cables as a high-speed signal connection method in AI server cabinets, may greatly accelerate the development of the company's special wire business. In addition, the company's superconducting subsidiary in Shanghai, which holds 18% of the shares, has accumulated deep accumulation in the field of second-generation high-temperature superconducting strips, quickly expanded production capacity and began supplying many of the world's leading nuclear fusion research groups and commercial companies, and the future prospects are broad.
Give an “increase in wealth” investment rating. The company's traditional round copper wire and round aluminum wire shipments are leading in the industry, and the competitiveness is clear; flat wire for new energy vehicles is developing rapidly, and special wire businesses such as silver plating are benefiting from the development of the AI industry and changes in copper connection technology; in addition, the high-temperature superconducting strips of the Shanghai Superconducting Company invested by the company have broad prospects in commercial nuclear fusion and other fields. Adjust profit forecasts and give an “increase in holdings” rating.
Risk warning: Increased competition has led to declining profitability and lower market development than expected.