Incidents:
Recently, the company released its 2023 annual report. In 2023, the company achieved operating income of 36.396 billion yuan, +13.66% year on year; realized net profit of 3.274 billion yuan, +28.99% year on year; single 2023Q4 company achieved operating income of 9.155 billion yuan, about +11% year on year; and net profit to mother of 807 million yuan, +39.98% year over year.
The gross margin increased, and the cost ratio increased slightly during the period. In 2023, the company's gross sales margin was about 22.05%, about +1.39pct year on year; the net profit margin was about 9.53%, +1.32pct year on year. The main reason may be the acceleration of the intelligent coal mine transformation business and the continuous advancement of the auto parts business. The company's cost ratio for the period was 11.29%, +0.60pct. Of these, sales/management/R&D/finance expenses accounted for 3.09%/3.46%/4.28%/0.45% of operating income, mainly due to sales and management expense ratios of +0.56pct and +0.04pct year over year, and overall cost control was good. In 2023, the company achieved net operating cash flow of 3,057 billion yuan, of which net operating cash flow of 1,838 billion yuan was achieved in Q4.
SEG's performance has improved dramatically, and the auto zero business has entered a new chapter. The core of the company's auto parts segment involves SEG and ASIMCO. In 2023, SEG achieved revenue of 174,3.4879 million euros, +4.01% over the same period; achieved net profit of 18.547.21 million yuan, mainly due to good performance in the Indian and North American automobile markets, continuous optimization of the 12V and 48V BRM competitive pattern, increasing the company's market share in Europe and the US, mass-production of 48V BRM second-generation products with self-developed inverters and receiving 48VBRM orders from leading European car companies; at the same time, it has successively achieved mass production and batch volumes of products such as high-voltage relays and 800V flat wire adhesive rotors Supply formed the capacity for large-scale industrial production of new energy electric drives; in 2023, ASIMCO achieved overall revenue of 4236.0844 million yuan, which was mainly due to the elimination of the impact of the epidemic and the recovery of the automobile market, but was affected by ASIMCO's goodwill impairment preparations in Shanxi by about 43.623 million yuan. The net profit of the auto zero sector decreased by about 79.1372 million yuan year on year, but after excluding the effects of impairment of goodwill and asset disposal, the net profit of the auto zero sector increased by 140.5579 million yuan year on year.
Management and operation are continuously optimized, and issuing performance incentives is optimistic about medium- to long-term development. At the end of March, the company announced the 2024-2026 performance incentive plan to evaluate the annual weighted average return on net assets - ROE. The company's management continues to optimize operations and is optimistic about the company's medium- to long-term development.
Investment rating: The company's net profit for 2024-2026 is estimated to be $3,782 billion, $4.303 billion, and $4.771 billion, respectively. The corresponding PE is 7.66, 6.73, and 6.07, respectively, covered for the first time, giving it a “buy” rating.
Risk warning: Market competition increases risk; risk of failure of profit forecasting and valuation models