Incident: The company released its 2023 annual report. In 2023, the company achieved revenue of 1,835 billion yuan, +19.20% year-on-year; net profit to mother was 320 million yuan, +35.73% year-on-year.
Major electronics projects continue to be built and put into operation, and the helium supply chain system is improving day by day. Thanks to the commissioning of new projects and increased helium sales, the company's revenue grew steadily. By product, (1) Electronic bulk gas: revenue in 2023 was 1,211 billion yuan, +25.14% year over year; due to fluctuations in helium gas prices, the gross margin of electronic bulk gas declined. The gross margin in 2023 was 39.10%, -5.42pct year on year. The company obtained electronic bulk gas projects such as Xi'an Xinxin, Guangzhou Zengxin, Guangzhou Guangxin, Shenzhen Saifa, and Beijing Xilex, and actively promoted the continuous construction of electronic bulk gas stations for various key projects such as the Hefei Comprehensive Insurance Zone, Huaxing Optoelectronics T9, Hefei Changxin Phase II, Beijing Changxin Electric Collection, and Shanghai Dingtai Jiangxin. In terms of the helium business, helium production bases in Guangzhou and Wuhan have been completed and put into operation. At the same time, the company is developing more helium resources, developing high-quality helium terminal customers at home and abroad, and improving the global supply chain system. Subsequently, as key projects are completed and commercialized one after another, it will lead to an increase in performance. (2) General Industrial Gas: 2023 revenue was 515 million yuan, +15.60% year over year; gross margin was 24.35%, -5.05 pct year on year.
The company continues to increase investment in R&D and develop core technology. The company invested a total of 88.7596 million yuan in R&D expenses in 2023, an increase of 23.79% over the previous year. The company independently developed the “Super-N” and “Fast-N” series nitrogen generation devices, which reached the technical level of foreign gas companies. The company successfully independently developed sub-supercritical carbon dioxide delivery technology, becoming one of the few companies in the world that has mastered this technology, filling the domestic gap; the company launched a next-generation gas cylinder intelligent operating system “HandlingPilot?” based on the application of intelligent gas cylinder filling systems Through computer vision technology and robotics technology, gas cylinder filling can be “unmanned”. In 2023, the company and its subsidiaries applied for 39 patents and obtained 22 patent authorizations. By the end of 2023, 111 patents had been granted, an increase of 24.72% over the end of the previous year.
The company firmly adheres to the “semiconductor+industrial base” industry development strategy and develops a strategic layout of electronic specialty gas. With the Guangdong-Hong Kong-Macao Greater Bay Area as the core, the company continues to develop business around industrial clusters such as the Yangtze River Delta region, Beijing-Tianjin-Hebei region, and the central and western regions, and has successfully obtained various electronic bulk gas supply projects in Guangzhou, Shenzhen, Shanghai, Beijing, Hefei, Xi'an, etc., consolidating the company's leading position in the domestic electronic bulk gas business. At the same time, in order to extend the electronic ultra-pure gas product chain and consolidate and develop existing electronic bulk gas customers, the company carried out the strategic layout of the electronic specialty gas business in due course. It is expected that the electronic specialty gas project will enter the comprehensive construction stage in 2024 to build an autonomous and controlled electronic special gas supply system to promote the company's sustainable and high-quality development.
Profit forecast and investment advice: The company mainly focuses on electronic bulk carrier gas, develops helium gas and electronic special gas collaboratively, and is committed to becoming a world-class comprehensive gas company. The company always insists that technological innovation leads high-quality development. Combining new technologies, new materials, new processes, new designs and new equipment, the company continuously enhances its core competitiveness and provides customers with greener, more energy-efficient and efficient gas technology solutions. With the gradual implementation of the project, the company's future performance is expected to grow steadily. We estimate that the net profit due to mother in 2023-2025 will be 350 million, 467 million, and 610 million, respectively. Corresponding to the current PE, it is 38 times, 28 times, and 22 times, respectively, giving it a “buy” rating.
Risk warning: downstream demand falls short of expectations, R&D falls short of expectations, fluctuating raw material prices, increased industry competition, etc.