Incident: The company released its annual report, and achieved operating income of 21.04 billion yuan, an increase of 1.1%; net profit to mother of 1.88 billion yuan, an increase of 0.4%, a net interest rate of 8.9% to mother, a decrease of 0.1 pct; net profit of non-return to mother of 1.76 billion yuan, a decrease of 1.8%, after deducting a net interest rate of 8.4% and a decrease of 0.2 pct.
Looking at a single quarter, 23Q1-Q4 achieved revenue of 54.4/47.7/72.4/3.58 billion yuan, a year-on-year change of +18.6%/-7.1%/+0.2%; net profit to mother of 4.8/4.2/6.6/360 million yuan, a year-on-year change of +50.5%/+12.0%/-3.5%/-27.9%.
The consolidated gross margin in '23 was 16.5%, up 0.1 pct. The cost rate for the period was 6.2%, an increase of 0.7 pct.
Among them, sales/management/R&D/finance expenses were 3.0%/2.3%/2.8%/-2.0%, respectively, with year-on-year changes of +0.2pct/+0.2pct/+0.4pct/-0.1pct. In 2023, the company focused on its main business, continued to give full play to its brand advantages, and business performance increased slightly.
Revenue is expanding steadily, and demand for electric tricycles is growing at an accelerated pace. By product, sales of electric bicycle/electric two-wheeler/electric tricycle/electric tricycle/accessories achieved revenue of 128.5/58.1/14.3/650 million yuan respectively, a year-on-year change of +5.9%/-18.7%/+79.9%/+10.4%, accounting for 61.1%/27.6%/6.8%/3.1%.
Among them, electric bicycle/electric two-wheeled motorcycles/electric tricycles sold 760/269/43 million units respectively, a year-on-year change of +5.1%/-17.8%/+63.2%. The gross margin of electric bicycles/electric two-wheeled motorcycles/electric tricycles in '23 was 16.6%/14.8%/21.6%, respectively, with year-on-year change of -0.5pct/-0.4pct/+5.0pct.
Sales of electric bicycles, the company's main product, increased slightly during the reporting period; sales of electric two-wheeled motorcycles declined year-on-year due to market competition and consumption habits; demand for electric tricycles showed an accelerated growth trend; and the total revenue of other short travel transportation products increased sharply during the reporting period due to the acquisition of Green New Energy.
East China maintains a leading sales scale, and the growth rate in central China, southwest China, and northwest China is growing faster. By region, domestic/overseas/undesignated regional revenue was 207.4/2.3/0.7 billion yuan respectively in 23 years, a year-on-year change of +1.3%/+2.2%/-41.4%, accounting for 98.6%/1.1%/0.3%; gross margin was 16.5%/19.8%/18.8%, respectively. The company actively expands business channels and balances the main domestic sales areas.
In terms of domestic revenue breakdown, Northeast China/East China/North China/Central China/Southwest/Southwest/Northwest China achieved revenue of 4.8/75.4/24.2/34.5/33.2/18.9/1.48 billion yuan, a year-on-year change of -6.6%/-9.7%/-10.7%/+15.7%/+27.8%/+83.2%; gross margins were 16.7%/16.9%/16.6%/17.5%/16.8%/16.5%/16.8%, respectively. By sales model, distribution/direct sales revenue in '23 was 201.9/680 million yuan, a year-on-year change of +1.3%/-5.6%, accounting for 96.7%/3.3%; gross margin was 16.4%/15.8%, respectively, an increase of 0.04pct/3.3pct.
Profit forecast and rating: We expect net profit for 24-25 to be 22.3 billion yuan and 2.70 billion yuan respectively. The current stock price is 13/11 times PE for 24/25, 17-19 times PE for 24, and a reasonable value range of 44.0-49.1 yuan/share, giving a “superior to market” rating.
Risk warning: The demand side falls short of expectations, competition in the electric two-wheeler industry intensifies, and raw material prices fluctuate.