Incident: The company released its 2023 annual report. For the full year of 2023, the company's total revenue was 1,845 million yuan, up 88.66% year on year, and net profit to mother was 133 million yuan, up 1.97% year on year. According to single quarter data, total revenue for the fourth quarter of 2023 was 435 million yuan, down 16.25% year on year, and net profit for the fourth quarter was 30 million yuan, down 11.63% year on year.

Large-scale manufacturing capabilities are outstanding, and the foundation for overseas diversion is strong. Gongxun Power's business has manufacturing bases in Luoding, Dongguan, etc., and the Guangdong Luoding base has an annual production capacity of up to 160 million chargers, with a cumulative global shipment volume of more than 2 billion. In 2023, by region, the company's power supply business had overseas revenue of 522 million yuan, accounting for 28.28% of total revenue, an increase of 182.90% over the previous year. The company has now passed product safety certifications in China, the United States, Europe, Japan, Germany, Australia, Singapore, Switzerland, etc., and has established a solid foundation for continuing to open up product sales channels and push the company to become a globally competitive industry leader.

Respond positively to market expansion products and vigorously expand Chen's high-power telecom business. In 2023, the power supply business achieved revenue of 1,174 billion yuan, an increase of 231.75% over the previous year. The high-power power supply business is an important development direction in the company's power supply business. On the basis of the household photovoltaic power supply business, the company has expanded to businesses such as industrial and commercial photovoltaic power supplies, digital center power supplies, and station energy power supplies based on excellent quality performance, large-scale manufacturing capabilities, and leading customer development and service capabilities, boosting the high-power power product category. In 2023, the high-power power supply and other power supply business achieved sales revenue of 144 million yuan, achieving a new breakthrough in strategic business revenue.

Laying out the three core components of photovoltaics, the company's holding subsidiary Luo Ding Yada has nearly 30 years of experience. It has been the main production base for Alfsen in China, has maintained long-term cooperative and supply relationships with global first-tier brand customers, and is one of the pioneers in the power supply industry. The company's power supply business is mainly divided into consumer electronics power supply business and high-power power supply business. The high-power power supply business mainly includes new energy intelligent photovoltaics and energy storage power supply business. The new energy smart photovoltaic power supply business is mainly photovoltaic inverters, photovoltaic optimizers, and energy storage converters. All three are core components in photovoltaic systems. The acceleration of the domestic generalization process of core components is expected to bring new opportunities to the company. Investment suggestions: We expect the company to achieve revenue of 25.70/37.64/4.996 billion yuan in 2024-2026, and net profit to mother of 2.46/3.39/ 449 million yuan, respectively. EPS is 0.97/1.34/1.78 yuan, and P/E is 18/13/10 times, respectively. Covered for the first time, giving a “Recommended” rating.

Risk warning: The macroeconomy falls short of expectations, R&D progress falls short of expectations, and market demand falls short of expectations.