Incidents:
Nova Nebula released its 2023 annual report today. Its main data was disclosed in the prospectus. It achieved annual operating income of 3,054 billion yuan, an increase of 40.49% over the previous year, achieved net profit of 607 million yuan, an increase of 96.96% over the previous year, and achieved net cash flow of 255 million yuan from operating activities, which was corrected year on year, and achieved free cash flow of 77 million yuan, a year-on-year correction.
Comment:
The LED display control and video processing system have both high amplification. By project, LED display control systems achieved revenue of 1,441 billion yuan, up 30.19% year on year, gross margin reached 42.18%, up 5.69 percentage points year on year; video processing systems achieved revenue of 1,225 billion yuan, up 58.76% year on year, gross margin reached 62.79%, up 4.02 percentage points year on year; cloud-based information publishing and management system achieved revenue of 159 million yuan, up 16.65% year on year, and gross margin reached 54.34%, up 7.63 percentage points year on year; accessories and others realized Revenue was 147 million yuan, up 38.22% year on year, and other businesses achieved revenue of 32.4 million yuan, an increase of 50.41% year on year.
Profit margins have been further improved, and high R&D investment continues to polish the company's core competitiveness. The company invested 442 million yuan in R&D in 2023, accounting for 14.47% of revenue, and received the title of “National Industrial Design Center” recognized by the Ministry of Industry and Information Technology. By the end of the reporting period, the number of R&D personnel in the company was 1,176, accounting for 42.41%. The company has mastered five core technologies, including high-precision full-grayscale brightness correction technology, which has formed a significant intellectual property advantage. During the reporting period, the company's sales expense ratio/management expense ratio were 13.14% /4.68 percent, respectively, up 1.28/-1.66 percentage points from the previous year. With the company's gross margin increasing by 5.75 points to 52.35% year on year, the company's operating profit margin reached 20.06%, an increase of 6.34 percentage points year over year.
High dividends and high returns show the true character of a hero. Just two months after listing, the company responded positively to regulation and proposed a high-dividend plan: the company announced that it plans to distribute cash dividends of RMB 97 (tax included) for every 10 shares based on the company's current total share capital of 51.36 million shares, for a total cash dividend of 49,8192 million yuan (tax included), corresponding to a dividend rate of about 2%. The capital fund was used to transfer 8 shares for every 10 shares to all shareholders, for a total increase of 41.088 million shares. This will significantly reduce the company's share price.
Investment advice: Maintain a “buy” rating. In 2024-2026, the company is expected to achieve operating income of 43.21/60.96/8.512 billion yuan, an increase of 41.47%/41.10%/39.63%; net profit to mother of 9.13/13.38/1.954 billion yuan, an increase of 50.32%/46.59%/46.07% year-on-year.
Risk warning: Mini/microLED technology development falls short of expectations; industry competition intensifies, etc.