Revenue and net profit to mother grew steadily in '23. The company discloses its 2023 annual report. In 2023, the company achieved revenue of 86.314 billion yuan, up 12.73% year on year; net profit to mother was 240 million yuan, up 18.30% year on year; net operating cash flow was 112 million yuan, down 90.26% year on year, mainly due to the company increasing capital investment in supply chain business. Q4 revenue was 19.767 billion yuan, up 12.61% year on year; net profit to mother was 73 billion yuan, up 12.52% year on year. In 2023, the sum of the company's R&D expenses, sales expenses and management expenses increased by 3.33%, of which sales expenses were 452 million yuan, up 3.82% year on year; management expenses were 149 million yuan, down 0.08% year on year; and R&D expenses were 127 million yuan, up 5.79% year on year.
The offline business of industrial data services has rapidly resumed growth, and the AI layout is progressing steadily. In 2023, the company's industrial data service sector achieved revenue of 802 million yuan, up 15.99% year on year, with a three-year compound growth rate of 18.90%; of these, data subscription revenue was 439 million yuan, up 4.79% year on year, compound growth rate of 17.72%; business promotion revenue was 186 million yuan, up 21.20% year on year; conference and training revenue was 97 million yuan, up 90.09% year on year; and research and consulting revenue was 58 million yuan, up 24.73% year on year. In 2023, the company continued to increase investment in R&D, using big language models and AIGC technology, etc., to carry out cutting-edge exploration in data integration and utilization, developed the 1.0 version of the “Steel Master” vertical commodity industry model, and developed the “Xiaogang” intelligent assistant application. The company and various organizations such as Dalian Maritime University, Harbin Institute of Technology, and Northwest Agriculture and Forestry jointly undertook the national key R&D program “Research and Application Demonstration of Key Techniques for Intelligent Monitoring of Commodity Price Risks”, and jointly built a “Commodity Explainable Artificial Intelligence Forecast System” for the commodity sector with the Fudan University School of Management.
The steel trading business is growing steadily, and steel and silver e-commerce continues to deepen the value of the platform. In 2023, steel and silver e-commerce achieved revenue of 85.508 billion yuan, an increase of 12.70% year on year; net profit to mother was 320 million yuan, an increase of 17.28% year on year. The settlement volume of the steel and silver platform in 2023 was 63.6407 million tons, an increase of 20.14% over the previous year. On March 13, the platform's single-day turnover exceeded 412,800 tons, a record high in daily trading volume. By the end of 2023, steel and silver e-commerce platform enterprises had more than 180,000 registered users, more than 350 cooperative steel mills, more than 500 cooperative warehouses, and 50 domestic service sites. The company adheres to the “platform+service” strategy, relies on emerging technologies such as the Internet, big data, cloud computing, etc., to connect upstream and downstream, integrate industrial chain resources, and maintain a stable and healthy development trend driven by the “double wisdom” of smart risk control and smart services.
Profit forecasting and investment advice. We believe that the company is a leading data service provider in the commodity industry. The data element policy is expected to be introduced and implemented one after another, and the company will usher in broad development prospects. We expect the company's net profit to be 289/346/411 million yuan in 2024-2026, up 20.2%/19.7%/18.9% year-on-year; EPS will be 0.90/1.07/1.28 yuan, respectively. Referring to comparable companies, based on the current industry stage, the company was given 32-35 times the 2024 dynamic PE, with a reasonable value range of 28.80-31.50 yuan, maintaining a “superior to the market” rating.
Risk warning. Policy progress fell short of expectations; risk of fluctuations in supply and demand and prices in the steel industry.
Compliance Reminder: The company acts as a market maker for [835092 Steel and Silver E-commerce] in the national SME share transfer system.