The company announced its 2023 results, achieving operating income of 21.036 billion yuan, +1.12% year on year; achieving net profit of 1,881 billion yuan, +0.41% year over year. The annual performance was steady. The electric bicycle business grew steadily, and the performance of tricycle products was impressive. The company focuses on high-end intelligent strategies, strengthens brand building, and expects an increase in share.
Annual results have been rising steadily, Q4 profits are under pressure, and high dividends have given back to shareholders. For the full year of 2023, the company achieved operating income of 21.036 billion yuan, +1.12% year on year; realized net profit attributable to mother of 1,881 billion yuan, +0.41% year over year; net profit after deducting non-return to mother was 1,764 billion yuan, -1.83% year on year. Q4 The company's revenue was 3.581 billion yuan, +0.18% year-on-year; quarterly net profit to mother was 324 million yuan, -34.89% year-on-year. The company maintained stable operating income and profit in 2023 in the face of a competitive price war. The company's 2023 profit distribution plan is to distribute a cash dividend of 5.34 yuan (tax included) per share, accounting for 40.01% of the full year's net profit.
The electric bicycle business is growing steadily, and the performance of tricycles products is impressive. The electric bicycle business achieved sales revenue of 12.845 billion yuan during the reporting period, +5.85% year-on-year. In contrast, the electric two-wheeled motorcycle business was affected by the market and consumer preferences, and sales revenue declined. The electric tricycle business showed strong growth, with sales revenue of 1,435 billion yuan, up 79.90% year on year, and gross margin increased by 5.00 pct. The company closely focuses on the strategic axis of “customer first, excellent products, intensive market cultivation, and fine operation” and the strategic direction of technology company transformation, focusing on the R&D and manufacturing business of electric two-wheelers to maintain product brand influence.
Sales and management investment have increased, and profitability is stable. For the full year of 2023, the company achieved a gross profit margin of 16.51%, +0.15pct year on year, and achieved a net profit margin of 8.94%, which was basically the same as the previous year. In 2023, the company's cost rate for the period was 6.15%, +0.65pct, of which the management fee rate was 2.25%, +0.17pct, mainly due to an increase in professional consulting service expenses and an increase in information system amortization; the sales expense ratio was 3.05%, +0.23pct, mainly due to the company expanding its sales team and increasing investment in marketing promotion; the R&D expenses rate was 2.80%, +0.36pct, mainly due to the company expanding the R&D team, increasing R&D investment and depreciation and amortization of R&D equipment. Market competition is fierce in 2023. In order to stabilize and expand market share and increase expenses during the period, the company is conducive to improving operational efficiency and service quality.
Focus on high-end intelligent strategies, strengthen brand building, and expect an increase in share. The company focuses on high-end intelligent strategies in various aspects to improve brand building: 1) on the product side, driving product quality improvement through innovation, focusing on iterative optimization and construction of explosives; 2) on the sales side, the company further integrates the value chains of manufacturers and dealers and expands cooperation to improve sales channel efficiency. 3) On the brand side, continue to maintain a high level of exposure, increase investment in R&D, increase the brand premium by increasing the added value of product technology, and enhance the brand's sense of technology and high-end fashion.
The company's growth path is clear, the leading advantage is stable, and the investment rating of “Highly Recommended” is maintained. The company's channel brand product moat is stable, and the industry demand group continues to expand. The company continues to take many steps to open up room for growth. The company's net profit from 2024 to 2026 is expected to be 2,229 billion yuan, 2,640 billion yuan, and 3.144 billion yuan respectively, up 18.5%, and 19.1% year-on-year respectively, corresponding to PE of 12.5X in 2024, maintaining a “highly recommended” rating.
Risk warning: Market competition increases risk; risk of fluctuations in raw materials; risk of changes in industry policies.