The company released its 2023 annual report. During the reporting period, the company achieved operating income of 1,408 billion yuan, an increase of 4.45%; net profit attributable to shareholders of listed companies was 905.909 million yuan, an increase of 4.97% year on year; net profit attributable to shareholders of listed companies deducted 65.267 million yuan for non-recurring profit and loss, an increase of 18.59% year on year. The company plans to distribute a cash dividend of 0.15 yuan (tax included) for every 10 shares, for a total cash dividend of RMB 10.7665 million.
The company released its report for the first quarter of 2024. During the reporting period, the company achieved revenue of 204 million yuan, a year-on-year decrease of 2.7%; net profit attributable to shareholders of listed companies was 9.833,600 yuan, an increase of 8.57% year on year; net profit attributable to shareholders of listed companies deducted non-recurring profit and loss of 9.1603 million yuan, an increase of 7.27% year on year.
The company achieved both revenue and net profit growth in 2023, showing steady financial performance. In 2023, the company achieved revenue of 1,408 billion yuan, an increase of 4.45% over the previous year, of which traditional railway vehicle inspection-related business revenue was 216 million yuan, up 5.29% from 2022, and the nuclear industry-related business revenue was 544 million yuan, an increase of 3.11% over 2022. The intelligent simulation testing and microsystems business accounted for the highest revenue share of 613 million yuan, a slight increase over 2022. The company's gross margin of revenue was 20.70%, up from 20.04% in 2022. In 2023, net profit attributable to shareholders of listed companies was 905.09 million yuan, an increase of 4.97% over the previous year; net profit attributable to shareholders of listed companies was 6.5267 million yuan, an increase of 18.59% over the previous year. The subsidiary Xuanyu Space performed well in the field of intelligent test simulation systems and microsystems and control components, providing strong support for the company's overall performance. In terms of expenses, the company's sales expenses increased 13.48% year over year, management expenses increased 16.99% year over year, and financial expenses increased 128.01% year over year, mainly due to the large average loan size and increased interest expenses.
2024Q1 has significantly increased profitability. 2024Q1 achieved revenue of 204 million yuan, a year-on-year decrease of 2.7%; net profit attributable to shareholders of listed companies was 9.8336 million yuan, an increase of 8.57% year-on-year. Due to the reduction in the average loan size, financial expenses were 959,900 yuan, a year-on-year decrease of 41.69%; due to better repayment of long-age receivables, credit impairment losses were 2.231,000 yuan, a year-on-year decrease of 65.89%, and gross margin also increased significantly during the reporting period, reaching 26.01%.
R&D investment has increased, and fund-raising projects help industrialize scientific research results. The company's integrated collaborative innovation has reached a new level. In 2023, the company was approved as the first postdoctoral research workstation to continuously increase the introduction and cultivation of high-end innovative talents. The company continues to increase R&D investment, investing 83.96 million yuan in R&D throughout the year. The company is gradually putting into operation and construction of several projects. The Shunyi Aerospace Industrial Park Satellite Application Intelligent Equipment Industrial Base promised to use the raised capital of 236 million yuan, which is expected to be put into use by the end of this year. The company has completed many major aerospace projects with high quality, breaking through many key core technologies. The field of microprocessors and microsystems continues to promote the transformation of core technology research and development into products. A variety of high-performance chips have moved into the evaluation, certification, and batch production stage. With the implementation and commissioning of various projects, it is expected to guarantee the growth of the company's products.
Taking advantage of the explosion of the satellite internet industry, simulation and microsystems may explode. With years of deep cultivation in the field of measurement and control simulation technology, the subsidiary Xuanyu Space focuses on the field of measurement and control simulation of complex spacecraft systems in China, and has the characteristics of platformization, generalization, miniaturization, and modularity. The company's products have been successfully used in aerospace control system ground simulation testing, embedded computer ground testing and test data management. Considering the demand for 20,000 satellites brought by “GW Starlink” and “G60 Starlink”, the company may directly benefit from the explosion of the industry.
We have plenty of on-hand orders, accumulate high-quality customer resources, and accelerate the development of emerging markets. Despite the complex and changing market environment in 2023, the company still maintains its strategic strength, all employees in the market, and does its best to seek more strategic cooperation. Among them, a number of major project orders were signed with various railway administrations of China Railway, and the amount of new contracts signed throughout the year increased dramatically over the same period last year, creating favorable conditions for a steady recovery in business. The company's various processors and microsystem modules have been selected and applied by many customers, and have become suppliers to many major customers; the Control Systems Division's component products have further expanded into new market segments, made new progress in the low-cost and high-performance market segments, and obtained contract orders from many units. Among them, it has continued to increase its market share in the commercial aerospace market and has accumulated a number of high-quality customer resources. On the basis of deep cultivation of existing businesses, the company integrates complex robot task requirements in different application scenarios, uses technology as the driving force to accelerate the development of emerging markets, expand its first-mover advantage, and strive to create new business growth points. It successfully obtained orders for robots in fields such as waste treatment, and participated in project demonstration work for various special application scenarios, further clarifying the future development direction.
High dividends enhance shareholder returns, and related transactions are expected to achieve high growth. According to the “Shareholder Dividend Return Plan for the Next Three Years (2024-2026)” issued by the company, if there are no major investment plans or major cash expenses, and the net operating cash flow is timely, the company distributes profits in cash, and the profit distributed in cash is not less than 20% of the distributable profit achieved in that year. In 2023, the company plans to distribute a cash dividend of 0.15 yuan (tax included) for every 10 shares, for a total cash dividend of RMB 10.7665 million. The company expects the total amount of daily related transactions in 2024 to be 1,974 billion yuan, and the actual total amount of similar transactions last year was 1,658 billion yuan. Among them, the company expects sales to the China Launch Vehicle Technology Research Institute and other related parties in 2024 to be 892 million yuan, and the actual amount generated in 2023 is 669 million yuan, an increase of 33.33% compared with 23. Among them, related sales to the China Academy of Space Technology and its subsidiaries account for the largest share, with estimated sales reaching 766 million yuan, an increase of 32.67% over the actual amount generated in '23.
Profit forecast: Considering the slow development of satellite internet, we lowered our profit forecast for 2024-2026. We forecast the company's net profit to mother for 2024-2026 to be $109 million, $132 million, and $159 million, respectively, corresponding to valuations 64, 53, and 44 times, maintaining the “gain” rating.
Risk warning: Risk of fluctuations in downstream demand, the company's product development progress falling short of expectations, and changes in the competitive landscape.