Brief performance review
On April 24, 2024, the company released its 2023 annual report and the first quarter of 2024. For the full year of 2023, the company achieved operating income of 8.089 billion yuan, and realized net profit of 914 million yuan, or +6.03%; of these, Q4 achieved revenue of 2,982 billion yuan, +163.23%, and +33.24% in a single quarter, achieving net profit of 200 million yuan, +14.46% year on year, and -30.72% month on month; in the first quarter of 2024, the company achieved operating income of 2,218 billion yuan, +91.80% year-on-year, and -25.62% month-on-month. 260 million yuan, +17.79% YoY, +29.86% month-on-month. The performance was in line with expectations.
Management analysis
The product structure affects profit levels, and profitability is expected to bottom out: the company achieved gross profit margin of 30.51%, year-on-year -7.80pct, and achieved a net profit margin of 10.81% and -9.06pct year over year; of these, single Q4 achieved gross profit margin of 27.05%, -10.30pct, and -5.25pct month-on-month, achieving a net profit margin of 6.91%, -7.19pct, and month-on-month -5.43pct; 2024Q1 achieved a gross profit margin of 30.93%, -3.10pc year-on-year, and +3.88pct month-on-month, Achieving a net profit margin of 10.84%, -6.86pct year on year, and +3.93pct month-on-month, mainly because the gross margin of the company's screen-printing line equipment dropped significantly; at the same time, HJT line equipment began to be inspected one after another. Due to early stage production line transformation, the gross margin of HJT line equipment has not yet formed an effective support for increasing the company's overall gross margin. In the long run, as HJT production line construction matures, the company's profit level is expected to improve significantly.
Actively lay out display panels and semiconductor packaging equipment to open up a second growth curve: The company has accumulated and expanded the display panel equipment and semiconductor packaging equipment market with its own laser technology, and has taken the lead in localizing semiconductor wafer grinding equipment such as laser grooving, laser modified cutting, knife wheel cutting, grinding, and polishing equipment (the first dry polishing machine in China). In January 2024, the company's integrated wafer research and polishing equipment was successfully delivered to Huatian Technology, a leading domestic sealing and testing company. Various other semiconductor devices were delivered to customers such as Changdian Technology and San'an Optoelectronics and achieved stable mass production. The company's product competitiveness in the high-end intelligent manufacturing equipment industry continued to increase, and it is expected to contribute to performance in the next two years.
Profit Forecasts, Valuations, and Ratings
According to the latest judgment on the company's order structure and HJT industrialization, the company's 2024-2025 profit forecast was lowered to 13.3 (-40%) /14.1 (-50%) billion yuan, and the 2026 profit forecast was added to 1.74 billion yuan, corresponding EPS was 4.8, 5.0, and 6.2 yuan, respectively. The current stock price corresponding to PE is 25, 23, and 19 times, respectively, maintaining the “buy” rating.
Risk warning
Order confirmation fell short of expectations; order demand fell short of expectations; new business development fell short of expectations.