Brief performance review
On April 15, the company disclosed its annual report. In 2023, it achieved revenue of 5.440 billion yuan, an increase of 23.6% over the previous year, and realized net profit of 845 million yuan, an increase of 28.8% over the previous year. Among them, Q4 achieved revenue of 1,371 billion yuan, a year-on-year decrease of 17.5%, and realized net profit of 154 million yuan, a year-on-year decrease of 26.8%.
Management analysis
Data center business volume and profit both increased: in 2023, the company's data center achieved revenue of 2,671 billion yuan, a year-on-year increase of 14.5%, gross profit margin of 38.11%, and a year-on-year increase of 2.18 PCT. In the age of artificial intelligence, computing power data centers are in high demand. As one of the companies with the most complete range of data center infrastructure products in the industry, the company is actively launching different products such as modular UPS to meet changes in downstream demand, and data center revenue is expected to continue to grow steadily.
Affected by European inventories, the growth rate of the new energy business was under pressure: the company's new energy business achieved revenue of 1,154 billion yuan in the second half of the year, a year-on-year decrease of 26.6% and a decrease of 26.8% month-on-month, mainly due to the large accumulation of inventory in European household storage channels, which led to a month-on-month decline in the company's shipments. As downstream inventory is gradually digested, we expect the company's subsequent shipments to resume month-on-month growth.
Inventory improved significantly month-on-month, and operational efficiency gradually improved: by the end of 2023, the company's inventory was 1,100 billion yuan, down 10.5% month-on-month, and the number of inventory turnover days was 56.7 days, down 4.5 days from month to month. The company actively improves operational efficiency and accelerates inventory turnover, and is expected to complete the inventory step by step before the industry.
Profit Forecasts, Valuations, and Ratings
According to the company's annual report and our judgment on the industry, the company's 2024-2025E net profit was adjusted to 10.27 (-26%) and 13.33 (-24%) billion yuan, respectively. The net profit due to mother is estimated to be 1,628 billion yuan in 2026, corresponding to PE 13, 10, and 8 times, respectively, maintaining the “buy” rating.
Risk warning
Increased competition risks; downstream demand falling short of expectations; risk of large exchange rate fluctuations.