The 2023 results are in line with expectations. We are optimistic about NEV business growth, maintaining that the “Buy” rating company achieved operating income of 1,518 billion yuan and YoY +0.53% in 2023; realized net profit of 101 million yuan, YoY -34.67%; net profit after deducting non-return to mother of 89 million yuan, YoY -39.05%; and gross profit margin of 29.38%. Among them, Q4 2023 had revenue of 507 million yuan, YoY +9.40%; realized net profit of 11 million yuan, YoY -70.17%; net profit after deducting non-return to mother of 0.1 billion yuan, YoY -71.75%; and gross profit margin of 27.55%. Considering the marginal restoration of the rail transit business, we lowered our 2024/2025 profit forecast and added a 2026 performance forecast. We expect net profit to be 1.4/1.9/240 million yuan (previous value of 27/350 million yuan) for 2024/2025/2026, and the current stock price corresponds to PE of 45.5/34.0/26.5 times. We are optimistic about the company's long-term development and maintain a “buy” rating.
The rail transit business is under short-term pressure and waiting for demand to recover. Revenue from the DC charging gun business increased markedly in 2023. Yonggui Electric's rail transit industry segment revenue was 670 million yuan, or YOY -8.3%. The main reason for the decline in revenue was the decline in revenue from non-connector products such as rail transit doors and passages. The vehicle and energy information segment generated revenue of 770 million yuan, YOY +6.67%, of which the new energy business revenue was 7.2 billion yuan. Revenue from charging guns, especially DC charging guns, in the NEV business increased significantly. In addition, the company's military sector picked up, with revenue of 80 million yuan in 2023, YOY +35.14%. Looking ahead to 2024, the company's revenue is expected to return to positive growth with the restoration of rail transit business, the release of DC charging guns and liquid-cooled charging guns, and the company's efforts to expand overseas customers.
Connectors have entered the supply chain of domestic first-tier brands, and forward-looking development of next-generation liquid-cooled charging guns contributed to new kinetic energy companies that have been deeply involved in the rail transit field for many years. The products cover all types of high-speed rail, subways, buses, and locomotives, and occupy a leading position in the domestic rail transit connector segment. In the field of automotive and energy information, the company is seizing the rapid development opportunities of the industry, and automotive connector products have entered the domestic first-line brand and joint venture brand supply chain system. At the same time, the company has developed high-power liquid-cooled supercharging guns and national standard AC/DC charging guns, which have already entered the supply chain systems of customers such as Huawei, BYD, Green Energy Huicheng, and Telekom. In addition, the company actively promoted product technology upgrades, and launched research and development of next-generation liquid-cooled high-power charging gun products, next-generation EV1-EV6 series automotive high-voltage connectors, automotive Ethernet communication connectors, and Mini Fakra connectors, contributing new momentum to enterprise development.
Risk warning: Competition in the liquid-cooled charging gun industry intensifies; downstream demand falls short of expectations; new product development falls short of expectations.