occurrences

The company released its 2023 annual report on April 12, 2024. In 2023, the company achieved revenue of 1.105 billion yuan, a year-on-year increase of 38.2%, achieved net profit of 0.207 billion yuan, an increase of 33.3% over the previous year, and realized net profit after deducting non-return to mother of 0.176 billion yuan, an increase of 38.0% year-on-year. Among them, the fourth quarter achieved revenue of 0.405 billion yuan, a year-on-year increase of 70.5%, and net profit to mother of 0.088 billion yuan, an increase of 281.3% over the previous year.

Comment:

By reducing costs and increasing efficiency, it is expected that the cost rate will gradually be controlled, and profit performance may improve. In 2023, the company's gross margin was 46.1%, +2.5pct year on year, net margin was 18.7%, -0.7pct year on year.

The company's expense ratio has fluctuated greatly in recent years. The cost rate for the 2023 period was 27.9%, +1.6 pct. Among them, the sales expense ratio was 13.6%, the management expense ratio was 8.7%, and the management expense ratio increased significantly. The expense ratio of 23Q4 has improved. The sales expense ratio is 10.7%, and the management expense ratio is 7.4%. New business expansion has led to a rapid increase in expenses in recent years. The company is promoting cost reduction and efficiency, reasonable cost reduction and cost control, and the net interest rate performance may improve in the future.

Sales were high in 2023, and domestic and overseas prosperity grew. The number of new orders, shipments, and installations all maintained an increase of about 50% throughout 2023. Of the new orders, 50% were domestic and 50% overseas. The company has strong competitiveness in the industry. In the domestic market, the company's main products have a market share of about 70% in the wind power generation industry. In the international market, the company's lifting products have a market share of about 30% in the European wind power industry, and the market share of crawlers is close to 100% in North America and the Asia-Pacific region.

New products are being developed in the field of wind power, and expansion efforts are being stepped up in the non-wind power sector. In order to cope with the large-scale expansion of fans and technological developments such as flexible towers, hybrid towers, and floating fans, the company introduced a dual-engine linkage solution in the field of wind power, that is, using a large lift+free crawler; launched a high-load lift and a rack and pinion lift. The company is also actively expanding applications in other industries. In the field of industrial and construction lifting equipment, the company has successively developed and launched industrial elevators that can be used in industrial chimneys and bridges, and tower climbers that can be used in limited spaces such as power towers, tower cranes, and three-dimensional storage. In addition, it also includes the field of intelligent safety protection equipment and high-altitude emergency equipment.

Profit forecast and investment rating: The company is benefiting from the prosperity and growth of overseas markets, and the expense ratio is also expected to be controlled. We expect net profit to be 0.28 billion and 380 million yuan respectively for 24 and 25 years. The closing market value as of April 15 was 23.1 and 17.3 times PE in 24-25, maintaining a “buy” rating.

Risk factors: risk of offshore wind power development falling short of expectations, risk of fluctuating raw material prices, risk of increased industry competition.