The company released its 2023 annual report: revenue of 22.43 billion yuan, +11.27% year on year, net profit to mother of 3,524 billion yuan, +12.07% year on year, after deducting non-net profit of 3.495 billion yuan, +31.75% year on year.
Among them, revenue for the fourth quarter was 5.377 billion yuan, +15.02% year on year, net profit to mother of 768 million yuan, -3.44% year on year, after deducting non-net profit of 787 million yuan, +117% year over year. The year-on-year increase after deducting non-profit was mainly due to asset disposal revenue of 437 million yuan in the fourth quarter of 2022.
The basic gypsum board plate is stable, and the two wings of the business contributed to growth. In 2023, gypsum board revenue was 13.77 billion yuan, +3% year on year; light steel keel revenue was 2.29 billion yuan, -9%; waterproof revenue was 3.9 billion yuan, +24% year over year; paint was 390 million yuan, +12% year over year; revenue from other businesses such as “gypsum board +” was 2.17 billion yuan, +150% year over year; the main gypsum board business was stable, and the waterproofing, coating and “gypsum board+” business contributed revenue growth.
The profit level of gypsum board increased to a high level, and waterproofing turned a loss into a profit. The company's overall gross profit margin in 2023 was 29.9%, +0.8pct year on year; among them, gypsum board gross profit margin was 38.5%, +3.5pct year on year, mainly due to the company continuing to exercise pricing power, increasing high-end share, and declining raw material prices; light steel keel gross margin 18.7%, +2.1pct year on year; net profit margin of 154 million yuan, net profit margin of 3.9%, +7.0pct year on year; paint gross profit margin 29.2%; “gypsum board +” and other business gross profit margin 6.4% Currently, “Gypsum Board +” is still in the revenue generation period and the gross margin is low.
Cash flow and turnover improved year over year, and the company achieved high quality operations.
Profit forecasting and investment advice. We expect the company's net profit to be 43/57.7 billion yuan for 2024-2026, corresponding to PE of 10.7/8.9/8.1X. Referring to comparable company valuations and the company's future growth rate, we maintain the judgment that the company's reasonable value is 38.27 yuan/share, corresponding to the 2024 PE valuation of about 15X, maintaining a “buy” rating.
Risk warning. Risk of falling downstream demand, risk of raw material prices rising too fast, risk of drastic expansion of industry production capacity; risk of integration of waterproof business.