The company released its 2024 quarterly report. In 24Q1, it achieved operating income of 746 million yuan, an increase of 41.36% over the previous year; realized net profit of 61.975 million yuan, an increase of 146.93% over the previous year; and realized net profit of 54.38 million yuan after deduction, an increase of 169.65% over the previous year.
2024Q1 achieved rapid growth in both revenue and profit. The increase in revenue is mainly due to increased revenue from energy-saving products for temperature control in computer rooms, or is related to sales growth in integrated businesses. The gross margin of the 24Q1 company was 29.51%, down 3.22pct and 2.44pct month-on-month, respectively. The decline in gross margin may be mainly related to structural changes in the sales portfolio. The continuation of the trend of the impact of the business structure on gross margin throughout the year remains to be seen.
The 24Q1 net interest rate of the company was 8.26%, up 2.85pct year-on-year, mainly due to the increase in operating efficiency under the company's high revenue growth. 24Q1 sales expenses/ management expenses/ R&D expenses increased 6.58%/11.1%/24.57%, respectively. The sum of the four major cost rates was 21.64%, a year-on-year decrease of 5.52pct. Expense control was good, and operating efficiency improved significantly.
Looking ahead to 2024, the data center and energy storage business are expected to go hand in hand, continuing the high growth trend on the company's revenue and profit side. In the field of data center computer room temperature control, the company consolidates the technological innovation and product pioneering advantage of cloud computing data centers, continues to increase the market share of indirect evaporative cooling products, and deeply cultivate operators' share of collection and project delivery. The company has increased its expansion efforts in the field of liquid cooling computing power, benefiting from the booming demand for AI computing power in China and the increase in the penetration rate of liquid cooling technology. In the field of energy storage supporting temperature control, the company continues to upgrade products related to iterative liquid cooling, strengthen the promotion of the entire liquid cooling chain, and is expected to continue to increase its market share. In addition, the company's downstream application scenarios are rich, and many fields such as charging piles, industry, electric buses, cold chain vehicles, and rail transit trains have blossomed. In terms of production capacity, the first phase of production capacity was released at the South China production base, and the company started the second phase of construction of the South China base to meet the production capacity needs of electronic cooling, liquid cooling, energy storage facilities, automotive compressors, etc., while also speeding up the construction of the Zhengzhou base and overseas platform layout.
Investment advice: The company's net profit for 2024-2026 is estimated to be RMB 50/65/83 million yuan, corresponding to PE of 34/26/21X, respectively, maintaining an “increase in holdings” rating.
Risk warning: Market competition intensifies; promotion of liquid cooling products falls short of expectations; energy storage application boom declines.