The company released its 2024 quarterly report. Continued increase in R&D investment affects short-term net profit performance. The company is in a critical strategic transformation period. Development expenses are increasing to ensure product and technological breakthroughs in innovative business directions to support the company's long-term growth.
The company announced 24Q1 results. In 24Q1, the company achieved revenue of 1,178 billion yuan, a year-on-year increase of 1.01%; net profit to mother was 91 million yuan, a year-on-year decrease of 46.10%; after deducting non-net profit of 85 million yuan, a year-on-year decrease of 46.23%.
Gross margin remained stable, and labor efficiency declined slightly. The 24Q1 company's gross profit margin was 39.82%, down 1.01 percentage points from the previous year, and 2.87 percentage points higher than last year's gross profit margin of 36.95%. Judging from the 2023 data, the company's per capita income generation/profit generation was 39.96/35,500 yuan respectively, down 1.19/22,600 yuan from 2022, and the continuous growth trend of per capita income generation from 2020 to 2022 was suspended. We believe that in 2023, the company is in a critical period of strategic transformation. Investment in all areas has increased, and performance has experienced a painful period. With the gradual implementation of the company's AI products, there is still plenty of room for future improvements in human efficiency.
R&D investment continues to increase, and increased cost investment affects profits. The 24Q1 company achieved a sales/management/R&D expense ratio of 4.30%/9.62%/21.37%, with year-on-year changes of 0.96/0.30/5.12 percentage points, respectively. During the reporting period, the company increased R&D investment, with R&D expenses of 252 million yuan, an increase of 32.79% over the previous year; from 2020 to 2022, the company's R&D expenses were 12.43%/15.55%/18.13% respectively, and R&D expenses continued to increase. The company insisted on being technology-based, platformizing and commercializing technology accumulated over many years, and established a leading position in the intelligent industry through card positions and ecological advantages, and continued to innovate and expand the intelligent industry scenario with software value.
Net operating cash declined year over year, and accounts receivable increased slightly. The 24Q1 net cash flow from the company's operating activities was 164 million yuan, a year-on-year decrease of 50.21%, mainly due to a decrease in sales payments during the reporting period, an increase in employee-related expenses and other cash payments from operations. As of 24Q1, the company's accounts receivable were $1,972 million, up 4.45% year-on-year from the beginning of the year
Robotics is a key direction for the company's future development. On September 27, 2023, the company's robotics team, Xiaowu Intelligence, was established, establishing the core of the robotics business. The company has released intelligent mobile robot products for warehousing, logistics, and manufacturing scenarios. The company will continue to strategically integrate comprehensive resources such as products, technology, and teams in the robotics business, and will continue to cultivate a full range of products such as AMR, forklift robots, and composite robots.
Maintain a “Highly Recommended” rating. The company's revenue for 24-26 was adjusted to 60.60, 74.11, and 9.235 billion yuan, and net profit attributable to mother to $534, 7.11, and 951 million yuan, corresponding to PE 39.4, 29.6, and 22.1 times, maintaining the “Highly Recommended” rating.
Risk warning: New business development falls short of expectations, risk of bad accounts receivable.