Incident: The company released its 2023 annual report. For the full year of 2023, the company achieved total operating revenue of 15.121 billion yuan, +3.04% year-on-year, and net profit to mother of 555 million yuan, +34.97% year-on-year. Among them, Single 23Q4 achieved total revenue of 3.377 billion yuan, -8.25% year-on-year, -25.03% month-on-month, and net profit to mother of 77 million yuan, +2.02% year-on-year and -60.73% month-on-month.
The wire and cable business revenue increased steadily and continued to contribute stable cash flow to the company. In 2023, the company's power products business achieved revenue of 8.889 billion yuan, +4.43% year-on-year, gross profit margin of 12.27%, and +0.31pct year-on-year. The company's wire and cable business performance showed a steady upward trend. In terms of production capacity, the main structure of the company's northern base, Qingdao Wanma High-end Equipment Industrial Park (Phase I), was capped during the reporting period, and the Lin'an base equipment and cable production buildings were topped out. On the demand side, the continued steady increase in electricity demand and electricity consumption will also support the acceleration of China's power grid investment and construction, and I am optimistic about the steady growth of the company's power products business.
The net profit of polymer materials increased in 23 years, and the continuous expansion of production capacity contributed to the company's performance growth. In 2023, the company's polymer materials business achieved revenue of 4.872 billion yuan, +4.69% year on year, gross profit margin of 16.70%, +1.28 pct year on year, and the net profit side increased by more than 30% year on year. In terms of exports, the company's overseas sales increased 35% year-on-year in '23. After the signing of the Sinopec “Strategic Cooperation Agreement”, it is expected that it will further accelerate overseas market development with Sinopec Marketing and International Trade. In terms of production capacity, the company's high-voltage insulation production capacity reached 40,000 tons in '23, and production capacity is expected to expand to 60,000 tons in '24. In addition to this, Wanma Wanhua's production capacity is also continuing to advance, and is optimistic that the company will replace domestic high-voltage insulation materials and accelerate the overseas expansion of low-voltage insulation materials under the expansion of production capacity.
Industrial robot cable customers continued to develop, and sales of charging piles increased year-on-year. In 2023, the company's communications products, trade, services and other two businesses achieved revenue of 805/504 million yuan, -18.52%/+10.53% year-on-year, and a gross profit margin of 18.22%/19.31%, +1.47/3.07pct year-on-year. In the field of cables for industrial robots, the company continued to develop customers in 2023, while expanding the scope of cooperation with KUKA in the US, and expanding product sales from domestic to its European supply chain system, which is expected to further boost the company's performance in the future. In terms of new energy, the company achieved a 33% year-on-year increase in sales volume of charging equipment in '23, and orders for 24Q1 charging piles also ushered in a year-on-year increase. We are optimistic that the company's new energy business will further reduce losses.
Investment advice: The company's net profit for 24-26 is expected to be 716/9.38/1,274 million yuan, +29.0%/+30.9%/+35.9% YoY, and EPS 0.69/0.91/1.23 yuan respectively, maintaining the “buy” rating.
Risk warning: The progress of production capacity construction falls short of expectations; demand in the wire and cable industry falls short of expectations, etc.