Incident Overview

The company released its 2023 annual report. In 2023, the company achieved operating income of 1.05 billion yuan, +38.17% year on year, and realized net profit of 207 million yuan to mother, +33.33% year-on-year.

Overseas markets accelerated, and Q4 revenue growth accelerated markedly. In 2023, the company achieved revenue of 1.05 billion yuan, +38% year over year. Of these, Q4 achieved revenue of 405 million yuan, +70% year over year, exceeding market expectations. By business: 1) High-altitude safety lifting equipment: achieved revenue of 763 million yuan in 2023, +40% over the same period last year. 2) High-altitude safety protection equipment: achieved revenue of 287 million yuan in 2023, +48% year-on-year; 3) High-altitude safety operation services: achieved revenue of 45.42 million yuan in 2023, -20% year-on-year. By region, the company's domestic sales and export sales achieved revenue of 553 million yuan and 542 million yuan respectively in 2023, compared with +15% and +74%, respectively. In 2023, export revenue accounted for 49.50% of main business revenue, +10.13pct year on year, and overseas markets accelerated. In particular, the company actively develops new products and explores markets in other industries. In 2023, the company's other industries achieved revenue of 13 million yuan, +607% over the same period last year. Looking back, on the one hand, domestic demand for wind power is expected to continue to improve. On the other hand, the overseas wind power market is accelerating and revenue from other industries is being realized one after another, and the company's revenue side is expected to continue the rapid growth trend.

The gross margin of overseas business increased rapidly. Net profit after deduction of non-net profit remained flat year-on-year. The company's net profit to mother and net profit after deducting non-return to mother in 2023 were 2.07 million yuan and 176 million yuan respectively, +33% and +38%, respectively. In 2023, the company's net sales interest rate and net profit margin after deducting non-sales were 18.73% and 15.95%, respectively, compared with -0.68 and -0.02pct, respectively. The profit level declined slightly. 1) Gross profit margin: The gross margin of sales in 2023 was 46.13%, +2.46pct. Among them, the gross margin of high-altitude safety lifting equipment, high-altitude safety protection equipment, and high-altitude safety operation services was 47.33%, 41.96%, and 45.13%, respectively, -0.31, +8.33, and +10.81pct, respectively. Among them, domestic sales and export gross margins were 31.92% and 60.03%, respectively, and overseas gross margins increased rapidly. 2) Expense side: The company's expense ratio for the 2023 period was 27.89%, +1.62 pct. Among them, sales, management, R&D and finance expenses were 13.60%, 8.65%, 8.57%, and -2.94%, respectively, -0.32, +0.88, -0.42, and +1.48pct, respectively. The financial expense ratio increased significantly, mainly due to a decrease in exchange earnings.

Overseas market expansion & product expansion. Opening up the company's medium- to long-term growth space, the company's overseas business expansion and horizontal product expansion will open up growth space: 1) Overseas business is growing rapidly, and there is still plenty of room for improvement. The overseas wind power aerial work equipment market is larger than the domestic market. The company's products have obtained relevant overseas certifications, and there is still plenty of room for improvement in overseas revenue; 2) Continuously enrich and improve the product line, and the room for growth continues to open up. In the field of wind power, in order to adapt to high tower cylinders, the company introduced a dual-engine linkage solution (lift+no crawler); in order to adapt to the development of new technologies such as flexible towers, hybrid towers, and floating fans, the company developed and launched products such as heavy-duty lifts and rack and pinion lifts. In addition, the company is actively developing new products, such as material carriers, tower cranes, etc., while actively expanding new fields such as construction, communications, hydropower, bridges, and fire protection, which is expected to contribute new growth points to performance.

Investment advice

We expect the company's 2024-2026 revenue to be 1,475, 18.99, and 2,356 billion yuan, respectively, +34%, +29%, and +24%, the 2024-2026 net profit to mother will be 2.71, 3.57, and 461 million yuan, respectively, +31%, +32%, and +29%, the 2024-2026 EPS will be 1.79, 2.35, and 3.04 yuan, respectively. The 2024/4/12 stock price of 39.29 yuan corresponds to 22, 17 and 13 times PE. Covered for the first time, a “gain” rating was given.

Risk warning

New business expansion fell short of expectations, profit levels declined, wind power installations fell short of expectations, etc.