Event: The company released its 2023 annual report. In 2023, the company achieved revenue of 650 million yuan, +127.12% year-on-year, achieved net profit of 17 million yuan, reversed losses over the previous year, and realized net profit deducted from mother of 06 million yuan, reversing year-on-year losses. Among them, 2023Q4 achieved revenue of 139 million yuan, +20%/-46%; realized net loss to mother of 7.51 million yuan, with loss narrowing 91% year over year; realized deducted non-net loss of 5.15 million yuan, with loss narrowing 93% year over year; 23Q4 gross sales margin was 38.96%, +18.33/ +16.84pcts year over month; net sales margin -5.33%, +67.46pcts YoY.
The charging pile business is growing rapidly, and profitability continues to increase. According to data from the Charging Alliance, domestic charging infrastructure increased by 3.386 million units in 2023, of which the number of public charging stations increased by 929,000; by the end of 2023, the total number of charging facilities nationwide reached 8.596 million units, +65% over the same period last year, and continued to increase. The total revenue of the company's 23 charging stations reached 505 million yuan, accounting for 78% of the company's total revenue, with a gross margin of 33.34%, +5.72 pct; the revenue from industrial construction business (including energy storage) in '23 was 70 million yuan, +906% year-on-year, with a gross profit margin of 10.24%, and +9.35pct year-on-year. We estimate that the gross margin of the charging pile business rose rapidly in 2023Q4, mainly due to batch shipments of the company's 960KW charging pile products and the volume of overseas customers increasing the overall profit level. We expect the company's charging pile revenue to more than double in 2024, and maintain a gross margin of more than 35% for the whole year.
Demand for charging stacks increased, and the company's growth rate exceeded the industry average, and large-scale repurchases showed management's confidence in long-term development. With the large-scale application of supercharged batteries in electric vehicles, the demand for large-scale charging stacks and liquid-cooled overcharging for charging infrastructure construction is rapidly increasing. As a high-quality manufacturer of charging stacks, the company's product shipments and revenue growth rate far exceed the industry average. The company plans to repurchase 80 to 150 million yuan of the company's shares. By the end of March '24, it had repurchased more than 56 million yuan, demonstrating the management's confidence in long-term development.
Investment advice: Considering the continued increase in downstream demand for the company's products and the optimization of the product structure, we expect the company to achieve net profit of 1.58/2.95/479 million yuan in 2024-2026, +805/ +87%/+63% year over year, corresponding EPS of 0.23/0.42/0.69 yuan, maintaining the “buy” rating.
Risk warning: downstream demand falls short of expectations; overseas market expansion falls short of expectations; industry competition intensifies