The 23-year performance maintained steady growth, and product transformation and upgrading led to a slight increase in profitability over 23 years, achieving total revenue of 1,122 million yuan, YOY +10.2%; net profit to mother of 210 million yuan, YOY +18.1%; net profit after deducting non-return to mother of 184 million yuan, YOY +19.0%. Gross profit margin 46.4%, YOY+0.24pct; net profit margin 17.9%, YOY+1.18pct.

23Q4 achieved revenue of 247 million yuan, YOY +0.4%; net profit to mother of 0.28 million yuan, YOY -14.2%; net profit after deducting non-return to mother of 0.22 million yuan, YOY -27.4%. Gross profit margin 41.4%, net profit margin 11.1%.

23 years of business spin-off:

1. Electric power monitoring and integrated testing system for substations: achieved revenue of 496 million yuan, yoy +8.42%, gross profit margin of 46.86%, yoy+0.07pct.

2. Energy efficiency management products and systems: achieved revenue of 357 million yuan, yoy +20.16%, gross profit margin 46.77%, yoy+0.13pct.

3. Fire and electricity safety products: achieved revenue of 106 million yuan, yoy +6.54%.

4. Enterprise microgrid - other: achieved revenue of 46 million yuan, yoy +1.53%.

5. Electricity sensor: achieved revenue of 112 million yuan, yoy +5.75%.

Demand for traditional business slowed in '23, and new markets (overseas) and new business (new energy business) accelerated 1) In terms of traditional domestic business, the company had many registered projects in '23, which had lengthened investment cycles and delayed construction commencement, which affected the company's project implementation conversion rate to a certain extent.

2) New markets - Overseas, the company achieved overseas revenue of 33.11 million yuan in 23 years, yoy +128.1%; the overseas market company layout includes Southeast Asia, Europe, the Middle East, Africa, North America, etc., and trains business teams with Singapore as the center, so as to radiate the Southeast Asian market.

3) New business - In terms of new energy business, downstream demand is booming in both domestic and foreign markets. In '23, the company's new energy related products such as source network load storage platforms (charging piles, photovoltaics, and energy storage monitoring modules and systems) and charging pile products have developed well.

Profit forecasting

The company's business performance achieved steady growth in 2023. We are optimistic about the technical advantages brought by the company's 1) R&D iterative capabilities. The company's EMS 3.0 (Ancrei Microgrid Smart Energy Platform) was integrated into the optical storage and charging platform on the basis of the EMS 2.0 platform to achieve integrated flexible control of source network load storage; in 2023 EMS 3.0 has completed the product development architecture, and existing test projects are in operation; 2) The continuous development of new markets and new businesses will benefit from the growth in demand in overseas markets and new energy businesses.

Considering the background of the slowdown in the company's traditional domestic business demand in 23, we adjusted the company's 24-26 revenue forecast to 13.5, 18.2, and 2.36 billion yuan (the original value was 20.8 billion yuan and 2.82 billion yuan in 24-25), and the net profit forecast to the mother was 2.6, 3.4, and 450 million yuan (the original value was 360 million yuan and 490 million yuan in 24-25 years), yoy +28.50%/+31.56%/+32.48%, corresponding to the current valuation of 15, 11, and 9X PE, maintaining the “buy” rating.

Risk warning: business management and human resources risk, gross margin decline risk, accounts receivable risk, risk of product market expansion falling short of expectations, etc.