Brief performance review
On April 22, the company released its 23rd annual report. The company's revenue in '23 was 4.11 billion yuan, +7.5% year on year, net profit attributable to mother was 640 million yuan, +113% year over year, net profit after deducting non-return to mother was 40 million yuan, +47% year over year. The Q4 Company's revenue was 870 million yuan, -24.6% YoY, and net profit to mother was 60 million yuan, -10.6% YoY. The company plans to distribute a cash dividend of 0.68 yuan (tax included) for every 10 shares to all shareholders. The performance was in line with expectations.
Management analysis
Revenue from the automotive PTC and new energy equipment business increased rapidly. By product, the company's revenue from household PTC/automotive PTC/new energy equipment/optical communication materials/lithium battery steel shell business was 12.67/2.97/19.63/5.0/44 billion yuan respectively, -3.0%/+22.6%/+34.6%/+34.6%/-30.8%/-22.6% year-on-year. The increase in demand for new energy vehicles and the release of the company's targeted projects led to a high increase in PTC revenue for vehicles. The NEV equipment business was still at its peak delivery period for 23 years, and the pre-nickel plating business was constrained by a decline in lagging customer revenue.
Product structure improvements have led to an increase in PTC's profits, and profits from new energy equipment have remained strong. 1) Gross profit margin: The company's comprehensive gross profit margin for 23 years was 23.6%, +3.4pct year on year. Among them, the gross margins of household PTC, automotive PTC, new energy equipment, and optical communication materials were 19.4%, 24.2%, 29.8%, and 9.6%, respectively, +2.4/+2.3/+3.9/-1.5pct. The increase in the ratio of household shovel PTC and vehicle water cooling PTC led to profit optimization; 2) Rate: The company confirmed that the company's subsidiary Zhuhai had an increased ratio of 9.8%, +0.1pct year on year; 3) Non-recurring profit and loss: The company confirmed that the subsidiary in Zhuhai The revenue from the demolition and disposal of the Oriental plant was about 225 million yuan, a significant increase.
PTC's product structure continues to be optimized, and the lithium battery steel case is awaiting discharge. 1) PTC: The household PTC market is stable, and the blade ratio is expected to continue to increase, leading to profit optimization. New automotive PTC targets will continue to grow, and customer structure optimization & water cooling ratio increase are expected to drive high business growth; 2) New energy equipment: The company received new orders of about 1.7 billion yuan in 23, supporting revenue in 24 years, but as downstream photovoltaic production expansion slows down, it is expected that there will be pressure in the future; 3) Lithium battery steel case:
Losses increased year-on-year in '23. Currently, the company's products have passed material performance verification from customers such as Kodali, Everweft Lithium Energy, and Wuxi Jinyang, etc., and have been supplied in batches to customers such as Haishida and Hikindumen. It is expected that the volume will gradually increase over 24 years, and profits will gradually improve.
Profit Forecasts, Valuations, and Ratings
The company is a pioneer in replacing nickel-plated steel in domestic production. The pre-nickel plating business is expected to experience explosive growth, and the electric heater related business continues to expand horizontally and steadily increase. In 24-26, we expect the company's net profit to be 4.3/4.5/51 billion yuan, corresponding EPS being 0.29/0.31/0.34 yuan, and corresponding PE being 16/16/14X, respectively, and adjusting the rating to “increase holdings”.
Risk warning
Sales of new energy vehicles fell short of expectations, the expansion of photovoltaic silicon production fell short of expectations, mass production of downstream large cylindrical batteries fell short of expectations, and customer verification of pre-plated nickel-plated steel materials fell short of expectations.