The company released its 2023 annual report, and the 23-year results were in line with expectations. The company's revenue for the year 23 was 13.912 billion yuan, up 21.94% year on year; net profit to mother was 2,454 billion yuan, up 9.33% year on year; net profit after deducting non-net profit of 23 billion yuan was 2.387 billion yuan, up 12.27% year on year. 23Q4 achieved revenue of 5.16 billion yuan, a year-on-year increase of 20.0%; achieved net profit of 890 million yuan, an increase of 18.8% over the previous year. The Q4 performance growth rate increased month-on-month, and the overall performance was in line with expectations.
High-end equipment products are remarkable, and overseas market performance has reached a new high. In 2023, the company continued to promote the strategy of large overseas markets. Overseas market revenue reached 6.518 billion yuan, an increase of 60.57% over the previous year, and climbed to 46.85%; new orders accounted for 36.78% in '23. According to the company's annual report, electric fracking expands the North American market and is expected to achieve rapid growth. The company's complete electric drive fracturing equipment was sold to the North American market for the first time. Compared with diesel driven water, the 7000 electric fracturing equipment has higher horsepower and longer service life, forming a unique competitive advantage. Combining the company's technical advantages of leading competitors for 3-5 years and the proximity of the local renewal cycle for used equipment, the company's North American business penetration rate is expected to gradually increase.
There was an increase in new orders in '23, and stock orders declined slightly at the end of the year due to the completion of major projects. According to the company's annual report, the company accumulated orders of 13.956 billion yuan in 23, an increase of 9.65% over the previous year. At the end of the year, stock orders were 7.549 billion yuan, down 11.17% from the previous year. The company previously signed the KOC JPF-5 project and confirmed revenue of nearly 2 billion yuan within 23 years, and new orders failed to fill the gap.
We expect the overall market to continue to grow steadily in the face of relatively high oil prices in '24.
Profit forecasting and investment advice. We expect the company's net profit to be 27.8/31.2/3.57 billion yuan in 2024-2026, and the corresponding P/E is 12.2/10.9/9.5 times, respectively. Considering the company's full volume of orders in hand and steady growth in domestic and overseas markets, the company was given 15 xPE in 24 years, corresponding to a reasonable value of 40.7 yuan/share, maintaining the company's “buy” investment rating.
Risk warning: risk of falling crude oil and natural gas prices; risk of increased industry competition; risk of rising raw material costs, etc.