Incident: The company released a performance forecast for the first quarter of 2024. In the first quarter of 2024, the company expects to achieve net profit of 52 million yuan to 62 million yuan, a year-on-year increase of 173.26% to 225.82%. If calculated at the median value, it is estimated to achieve net profit of 57 million yuan, +19.84% month-on-month; net profit after deducting non-return to mother of 48 million yuan to 58 million yuan, a year-on-year increase of 180.99% to 239.53%. If calculated at the median value, it is expected to achieve net profit without return to mother of 53 million yuan Yuan, +210.25% YoY, +15.48% month-on-month. The company's orders in the first quarter of 2024 increased compared to the same period last year, revenue grew rapidly year on year, product gross margin increased compared to the same period last year, and the company's profitability increased.
New energy products continue to gain strength, increase overseas layout, and expand product types. The company's step-up transformer sales revenue exceeded 1 billion yuan in 2023, becoming the primary driving force for the company's growth after inductors. We expect the company's step-up transformer business to continue to be booming in the first quarter of 2024 and maintain rapid growth throughout 2024. The company is actively looking for new business growth points: in terms of product development, the company has completed the expansion of new energy product categories such as photovoltaic smart box-type substations and all-in-one computers, and achieved a breakthrough from 0 to 1, laying the foundation for subsequent growth; in terms of sales area expansion, the company has further increased its overseas layout. Boost conversion products have been successfully supplied directly to major overseas customers, and the export scale of distribution transformers is expected to expand rapidly as production capacity increases.
Increase production capacity at home and abroad, build and put into operation production bases in Malaysia, and actively prepare production bases in Anhui and Mexico. The company actively expanded the production capacity of the company's new energy products, invested in the construction of a production base in Shouxian County, Anhui in 2023, and further iteratively upgraded on the basis of the former Jiangxi digital factory. Currently, the main construction of the project has been completed, and it is expected to be put into operation in the first half of 2024. In 2023, the company's production base in Malaysia was built and put into operation, making it the company's first overseas factory; the company planned a production base for new energy products in Mexico to better promote the company to develop new customers in the North American market. The project is undergoing preliminary work and planning for land acquisition.
Investment advice: The company's net profit for 24-26 is expected to be 3.50/4.28/515 million yuan, respectively, or +67.3%/+22.1%/+20.5% year-on-year, corresponding PE of 16.9/13.8/11.5, maintaining a “buy” rating.
Risk warning: The growth rate of the new energy industry is declining; the expansion of new customers falls short of expectations; the progress of production expansion falls short of expectations.