Description of the event
Dazu Laser released its 2023 annual report. During the reporting period, the company achieved operating income of 14.091 billion yuan, a year-on-year decrease of 5.82%; realized net profit to mother of 820 million yuan, a year-on-year decrease of 32.47%; and realized net profit deducted from non-mother of 465 million yuan, a year-on-year decrease of 52.47%.
Incident comments
In the fourth quarter, the company achieved operating income of 4.704 billion yuan, a year-on-year increase of 6.93%; realized net profit of 184 million yuan, a year-on-year decrease of 8.36%; realized net profit without deduction of 95 million yuan, a year-on-year decrease of 39.85%. The gross sales margin for the fourth quarter of a single quarter was 33.18%, down 4.88pct from month to month; the net sales margin was 4.20%, down 3.03 pct from month to month, which is a normal impact of quarterly expense distribution and revenue recognition on profitability.
By business segment, the company's consumer electronics business achieved revenue of 2.83 billion yuan, an increase of 6.51% over the previous year. The company closely participated in the R&D and production equipment for MR head-mounted display terminals, a major North American customer, and launched new products such as metal 3D printing equipment. Automated wire welding equipment also grew significantly; the company's PCB equipment business achieved revenue of 1,634 billion yuan, a decrease of 41.34% over the previous year. Consumer demand for smart terminals is weak, and downstream customers' willingness to spend capital is being damaged, to be driven by PCB product upgrades and investment demand from Southeast Asia; the company's new energy equipment business achieved revenue of 2,601 billion yuan, a year-on-year decrease of 5.91%; newly launched products such as winders, roller slitting machines, and all-in-one cutting machines achieved small-batch sales; the company's semiconductor equipment (including pan-semiconductors) business achieved operating revenue of 2,126 billion yuan, an increase of 1.57% year over year. The LED market is slowly recovering. The company launched new equipment products such as micro-LED massive transfer, micro-LED massive welding, and micro-LED repair; the company's general industrial laser processing equipment business achieved revenue of 5.547 billion yuan, an increase of 5.30% over the previous year. Among them, high-power laser cutting equipment achieved revenue of 2,340 million yuan, an increase of 13.24% over the previous year; the high-power laser welding equipment business achieved revenue of 613 million yuan, an increase of 10.50% over the previous year. The company has made breakthroughs in key technologies such as thick plate cutting efficiency, special bevel processing technology, and ultra-high power laser cutting technology, and has also achieved breakthroughs in key industries such as steel structures and ships. Looking forward to the future, the company will actively support the production capacity construction needs of core customers in overseas regions.
The company has strong R&D strength, deep customer resources and outstanding brand advantages. It has long been a leader in the laser processing equipment industry. Short-term equity incentive costs and R&D expenses hamper performance. The company's 2024-2026 EPS is expected to be 1.04, 1.36, and 1.64, and the corresponding PE is 18.20, 13.93, and 11.55, respectively.
Risk warning
1. Consumer electronics recovery falls short of expectations;
2. The expansion of production of new energy equipment has declined.