Net profit for 2023 was 558 million yuan, higher than the performance report. The company announced that it achieved annual revenue of 3.91 billion yuan, a year-on-year increase of 7.67%, net profit of 558 million yuan, a year-on-year increase of 14.21%, higher than the performance report of 554 million yuan, a year-on-year increase of 12.74%, higher than the performance report of 521 million yuan, a gross profit margin of 40.92%, a year-on-year increase of 1.91 pcts, a year-on-year increase of 0.83 pct, and a year-on-year increase of 0.81 pct. 9.08%/10.42%/4.05%/0.42%, respectively, a total increase of 1.32pct year-on-year.
Revenue growth is at a record high in 6 quarters. 23Q4 achieved revenue of 1.0 billion yuan, or 23.77% year-on-year revenue growth. The growth rate was the highest revenue growth rate in the six quarters since Q2 2022 (22Q2/22Q3/22Q4/23Q1/23Q2/23Q3 revenue growth rates were +17.4%/-17.8%/-3.6%/+2.4%/+8.7%, respectively).
Major categories have all achieved restorative growth. The company's core categories of zippers and buttons all achieved restorative growth. The annual zipper revenue increased 6.8%, button revenue increased 9.0%, zipper sales volume increased 5.67% year on year, button sales volume was 8.9 billion pieces, up 4.63% year on year. Looking at the half-year situation, 23H2 zipper revenue growth rate was 17.3% (23H1 was -2.8%), and 23H2 button revenue growth rate was 14.3% (23H1 +3.2%), and the growth rate of both major businesses improved significantly. We believe that the improvement in sales conditions has led to an increase in production capacity utilization, which has a scale effect. The capacity utilization rate in 2023 was 66.81%, up 3.51 pcts year on year. Among them, Bangladesh's capacity utilization rate reached 50.60%, up 10.9 pct year on year. By business, gross margin was 41.01%, 2.95pct year on year, button gross margin was 42.21%, up 1.02 pct year on year.
The company's competitiveness continues to improve, and its share in the industry may continue to increase. In 10/11/12 2023, the growth rate of domestic macro retail sales of footwear was +7.5%/+22.0%/+26.0%, respectively, and the quarterly growth rate of 23Q4 clothing retail sales was 19.1%. Weixing's single-quarter revenue growth rate (23.77%) exceeded domestic terminal retail growth. Domestic business revenue increased 7.2% throughout the year. Among them, 23H2 increased 21.0% year on year, a significant improvement over 23H1's -5.6%. We believe that the company showed a growth rate exceeding the industry's recognition by customers, and is expected to continue to increase its share.
The company insists on transformation and upgrading, input and output, and focuses on globalization and digital intelligent manufacturing. Faced with the complex macroeconomic environment and economic situation, the company has always insisted on “sustainable development” as the core, closely adhering to the two main lines of “transformation and upgrading” and “input-output”, continuously increasing customer development and intelligent manufacturing, strengthening product leadership and organizational security, accelerating the deepening of global layout, promoting strategic transformation and implementation, continuously improving overall competitiveness, and achieving steady operation of the company in the face of industry downturn. Accelerate the construction of industrial parks in Vietnam, improve the management efficiency of industrial parks in Bangladesh, and provide a strong guarantee for international market expansion.
Accelerate the transformation of high-end intelligent manufacturing, continuously improve the level of production management, accelerate the implementation of “digital intelligence” manufacturing strategies, promote the transformation and upgrading of site management and manufacturing, and achieve both improvements in efficiency and efficiency per capita.
Profit forecasting and valuation. We expect revenue forecasts for 2024-2026 to be 43.7, 4.96 billion yuan, and 5.81 billion yuan, respectively, and net profit forecasts to mother of 6.11, 6.79, and 803 million yuan, respectively. The company will be given a 20-25 XPE in 2024, corresponding to a reasonable value range of 10.44-13.05 yuan, maintaining a “superior to the market” rating.
Risk warning. There is a risk of loss of orders, and capacity expansion falls short of expectations.