公司营收增速及毛利率呈逐季提升态势。公司四季度单季实现营收4.24 亿元，同比+28.5%；综合毛利率41.3%，同比+1.5pct。从各季度营收同比增速及毛利率同比变化看，虽然工业自动化需求受制造业低迷影响，公司2023 年营收增速及毛利率仍呈现逐季提升趋势。此外，公司2023 年经营性现金流净流入1.98亿元，维持了较好的经营质量。研发投入在2023 年进一步提升，研发费用率为9.76%，同比+0.81pct，研发人员占比达31.6%。公司PLC 及伺服产品在2023年需求萎缩情况下实现了增长，份额进一步提升，进口替代趋势延续。Matters:
The company released its 2023 annual report: the company achieved revenue of 1.51 billion yuan, +12.7% year on year; realized net profit of 199 million yuan, -10.4% year over year; realized net profit of 161 million yuan without return to mother, -16.6% year on year.
Commentary:
The company's revenue growth rate and gross margin showed a trend of increasing quarterly. The company achieved revenue of 424 million yuan in a single quarter, +28.5% year over year; comprehensive gross profit margin was 41.3%, +1.5pct year on year. Judging from the year-on-year revenue growth rate and year-on-year change in gross margin in each quarter, although demand for industrial automation was affected by the slump in the manufacturing industry, the company's revenue growth rate and gross margin in 2023 still showed a quarterly upward trend. In addition, the company had a net operating cash flow inflow of 198 million yuan in 2023, maintaining a good operating quality. R&D investment was further increased in 2023. The R&D cost rate was 9.76%, +0.81 pct compared to the previous year, and the proportion of R&D personnel reached 31.6%. The company's PLC and servo products achieved growth in the face of shrinking demand in 2023. The share was further increased, and the import substitution trend continued.
It drives the product to accelerate iteration, and the growth rate is excellent. The company's drive system business achieved revenue of 730 million yuan in 2023, +22.7% year-on-year, while the domestic servo scale was -4.1% year-on-year, and the company's driving business showed strong resilience. According to Rui Industrial, the domestic share of the company's servo products increased from 2.6% in 2022 to 3.0% in 2023, ranking third among mainland Chinese brands. The company-driven business gross margin was 24.3%, slightly +0.34pct year-on-year.
The gross margin of the company-driven business is far lower than that of PLC, and the growth rate is significantly higher than that of PLC. Considering the quarterly increase in the company's comprehensive gross margin, it is expected that the gross margin of the company-driven business will increase quarterly in 2023. The company is speeding up the technological iteration of driving products, improving the penetration rate of sewing, wire cutting, printing and other industries vertically through the introduction of a two-in-one servo system, further optimizing and improving the performance and types of products such as frequency conversion and stepping; developing a series of high-performance magnetic encoders to improve the overall performance of driving products. The intergenerational iteration cycle for domestic servos is generally 5 years. It is expected that the company's next generation servos will carry out major software and hardware upgrades on the DS5 series and further enhance the overall solution capabilities of the “PLC+ servo system”.
The PLC share increase is at a steady pace, and there is still much to be done. The company's PLC business achieved revenue of 535 million yuan in 2023, +4.81% year-on-year, while the domestic small PLC market size was -14.1% year-on-year during the same period. According to Rui Industrial, the domestic share of the company's small PLC products increased from 6.4% in 2022 to 7.5% in 2023, ranking second among domestic brands. PLC is the core component of the equipment control layer. It has strong software properties, high customer stickiness, good competitive pattern, and less competitive pressure on price. The gross margin of the company's PLC products in 2023 was 54.0%, which remained at a high level, and is still the ballast stone of the company's profitability. In addition, foreign investment in the domestic small PLC market reached 61.8% in 2023, while medium and large PLC accounted for 94.1%. As the core component of the control layer, PLC is of great strategic significance to achieve autonomy and control. There is plenty of room for import substitution, and the company still has great potential.
Investment advice: Considering that the recovery of the manufacturing industry in 2024 Q1 fell short of expectations, we slightly lowered the company's revenue and profit expectations for 2024-2025. We expect revenue for 2024-2026 to be 18.4 (previous value 18.9), 22.4 (previous value 23.3), and 2.70 billion yuan respectively; net profit to mother was 2.65 (previous value 3.05), 3.45 (previous value 3.97), and 435 million yuan respectively; EPS was 1.88, 2.45, and 3.10 yuan respectively, combined with the industry average valuation, and the company's The small PLC in the control layer has a wider moat, giving the company 23 times PE in 2024, with a target price of 43.2 yuan, maintaining a “strong push” rating.
Risk warning: The boom in the manufacturing industry falls short of expectations; the development progress of emerging industries falls short of expectations; the recovery in profitability falls short of expectations, etc.