Event: Yangjie Technology released its 2023 annual report. In 2023, the company achieved revenue of 5.410 billion yuan, yoy +0.12%; net profit to mother of 924 million yuan, yoy -12.85%; comprehensive gross profit margin of 30.26% for the whole year, a year-on-year decrease of 6.03pct. Among them, 2023Q4 achieved revenue of 1,369 million yuan, yoy +38.92%, qoq -3.30%; net profit to mother of 306 million yuan, yoy +130.95%, qoq +47.71%; and a consolidated gross profit margin of 28.46%, a year-on-year decrease of 8.68 pcts, a year-on-year decrease of 3.82 pcts.
23Q4 revenue increased year over year, and gross margin was under pressure in the short term. According to the company's announcement, thanks to a significant year-on-year increase in sales of the company's photovoltaic diodes, silicon carbide products, and IGBT products, the company achieved positive year-on-year growth in revenue and profit in 2023Q4. However, at the same time, due to further intensification of competition in the industry, the gross margin of high-income growth products is lower than the average gross profit margin of the company, which has led to a decline in the company's overall gross profit margin. We believe that as an established power company, the company also has overseas supply capacity. With the recovery of downstream demand and price stabilization, the company is expected to achieve steady and positive performance in the future.
“Double Brand+Double Cycle” creates international market capabilities. In 2023, the company achieved revenue of 1,215 billion yuan overseas, accounting for 22.46%. In the European and American markets, the company mainly promotes “MCC” brand products, sets up sales and technical service centers in the US and other places to provide localized services to overseas customers and actively explore overseas markets; in China and the Asia-Pacific region, the company mainly promotes “YJ” brand products, and has reached strategic partnerships with top customers in various industries through various sales and technical service centers in South Korea, Japan, India, Singapore, etc. At the same time, the company added a subsidiary, Meiweike (Vietnam) Co., Ltd., in Vietnam to further enhance overseas supply capacity and actively explore overseas business.
Focus on emerging fields and continuously update technology. In 2023, the company's revenue in the field of automotive electronics and clean energy grew rapidly. At the same time, the company quickly opened up a situation with high-quality clients at home and abroad in various fields, continued to expand cooperation with customers such as SMA and SOLAREDGE, and obtained certifications and orders from customers such as Amboff, Borg Warner, and United Electronics. In terms of technology iteration, in 2023, the company completed the development of various products in the fields of IGBTs, third-generation semiconductors, and SGT MOSFETs, and some products have been mass-produced and used in fields such as new energy vehicles, photovoltaics, charging piles, and data centers.
Profit forecast and investment suggestions: We expect the company's 2024E/2025E/2026E to achieve operating income of 65.2/81.4/10.18 billion yuan, yoy 20.5%/24.9%/25.0%; net profit to mother of 11.0/14.5/1.79 billion yuan, yoy 19.1%/32.0%/23.1%; corresponding to the current PE17.1/12.9/10.5x, the company has overseas supply capacity. We believe 2024 will be accompanied by stable product prices and Domestic and foreign demand is gradually picking up, and the company is expected to benefit deeply from it and upgrade its rating to “Highly Recommended”.
Risk warning: downstream demand falls short of expectations, overseas business progress falls short of expectations, product iteration falls short of expectations.