Operating performance improved steadily in 2023, and 24Q1 was under short-term pressure. The company released the 2023 annual report and the 2024 quarterly report. In 2023, it achieved operating income of 1.54 billion yuan, a year-on-year increase of 23.4%, a year-on-year increase of 42.7%, and realized net profit after deducted from mother of 151 million yuan, an increase of 54.8% over the previous year. Looking at the breakdown, the company achieved operating income of 360 million yuan in the fourth quarter of 2023, an increase of 46.6% over the previous year, and realized net profit of 20 million yuan, a year-on-year decrease of 7.1%. 9.7%; In the first quarter of 2024, the company achieved operating income of 410 million yuan, a year-on-year increase of 24.2%, realized net profit of 36 million yuan, a year-on-year decrease of 3.8%, and realized net profit of 32 million yuan without return to mother, an increase of 1.0% over the previous year.
Junction box shipments continued to grow, and profitability improved dramatically. In 2023, the company shipped 80.25 million sets of junction boxes, an increase of 37.3% over the previous year, and sales volume increased dramatically; in addition, the gross margin of the junction box increased sharply, from 14.8% in 2022 to 20.8% in 2023, an increase of 6.0 pcts over the previous year. Although the price of the product fell from 18.5 yuan to 15.5 yuan, the cost side fell even more significantly, and profitability improved dramatically.
New businesses such as interconnected wiring are growing strongly. The company achieved revenue of 210 million yuan in the connected wiring business in 2023, an increase of 117.6% over the previous year, and the gross margin increased from 22.1% in 2022 to 33.7%, an increase of 11 million yuan over the previous year.
6pcts, connected wiring products have shown a strong growth trend and have become one of the company's stable profit growth points. Based on the company's long-term development strategy, the company is actively exploring the second track product line. The company has completed the acquisition of a controlling interest in Jiangzhou Auto Parts Co., Ltd., and the company will make full use of existing production resources, technical resources and human resources to complete the layout of the auto parts industry on a risk-controlled basis, and contribute to profit and cash flow as soon as possible.
Profit forecast, valuation and investment rating: Considering the intensification of competition in the company's current industry, we lowered the company's 2024/2025 forecast revenue to $1,93/2.34 billion (previous value of $22.8/2.92 billion yuan), and is expected to achieve operating income of $2.88 billion in 2026; net profit due to mother was lowered to $2004/240 million (previous value of $31/380 million), and is expected to achieve net profit of RMB 280 million in 2026; based on current total share capital The diluted EPS in 2025 was reduced to 1.68/2.02/2.36, and the company's current stock price corresponding to 2024-2026 PE multiples was 19/16/13 times, respectively, downgraded to an “overweight” rating.
Risk warning: risk of PV demand falling short of expectations; risk of fluctuating raw material prices; risk of falling product prices; production capacity investment falling short of expectations; risk of not updating the information data used in research reports in a timely manner