Incident: The company released its 2023 annual report, achieving revenue of 5.32 billion yuan, a year-on-year increase of 16.69%, net profit to mother of 399 million yuan, a year-on-year increase of 4.75%, and net profit after deducting 318 million yuan, an increase of 10.04% over the previous year. The results were generally in line with expectations.
During the reporting period, the company achieved the merger of Harbin Dongsu. In 2023, the company merged with its holding subsidiary Harbin Electric Power Equipment Co., Ltd. (“Harbin Electronics” for short) under the same control. From the beginning of 2023 to the consolidated date, Harbin D&S achieved revenue of 1.12 billion yuan and net profit of 79 million yuan, a significant increase over the previous period of net profit of 59 million yuan. Among them, the merged party achieved revenue of 980 million yuan and net profit of 59 million yuan during the comparison period.
Contract liabilities have increased markedly. According to the company's annual report, the company's contract debt at the end of '23 was about 1.38 billion yuan, with an opening balance of 983 million yuan. According to the company's annual report, the main projects being executed are Bohai Shipyard Group Co., Ltd., China Nuclear Power Research and Design Institute, CNNC Energy Technology Co., Ltd., and China Nuclear Industry 23 Construction Co., Ltd. Furthermore, as of the date of the consolidation, the contract debt for Kazakhstan was about 1,068 billion yuan, compared to about 280 million yuan at the end of the previous period, which also achieved a significant increase.
Furthermore, the company's nuclear power revenue reached 686 million yuan, a year-on-year increase of 52.78%, accounting for 12.9% of revenue. Electric motors and services achieved revenue of 4.524 billion yuan, an increase of 13.17% over the previous year, accounting for 85.03% of revenue.
Currently, the nuclear power boom is on the rise, and fourth-generation nuclear power is developing rapidly. The company has completed the acquisition of the high-quality asset of Harbin Dongso. In the future, the company is expected to benefit from the development of three- and fourth-generation nuclear power. In addition, the company's current main products include energy-saving motors and energy-saving transformation of various types of motors. Downstream mainly in high-energy industries such as petrochemicals, coal chemicals, metallurgy, etc., in line with the general direction of equipment renewal, energy saving and consumption reduction.
Investment advice: We expect the company to achieve revenue of 5.86 billion, 65.7 billion yuan and 7.33 billion yuan in 2023-2025, respectively, and achieve net profit of 4.56, 5.30, and 618 million yuan, corresponding to PE15/13/11 times, respectively. Maintain a “Recommended” rating.
Risk warning: risk of macroeconomic fluctuations, risk of downstream demand falling short of expectations, risk of fourth generation nuclear power approval falling short of expected risk, risk of acquisition matters falling short of expectations, industry competition increasing risk