Core views:

The annual report fell slightly short of expectations, and the 24Q1 results were in line with expectations. The company released its annual report and quarterly report on April 23. In 23, the company achieved revenue of 2,412 billion yuan, net profit of 303 million yuan, -24.50% year on year, net profit after deducting non-return to mother of 280 million yuan, +22.89% year on year; looking at 23Q4 alone, the company achieved revenue of 605 million yuan, +11.40% year on year, net profit to mother 60 million yuan, year-on-year, -65.73%, net profit without return to mother of 82 million yuan, +31.58% year on year; 24Q1, the company achieved revenue of 6.62 million yuan Yuan, +9.07% year on year, net profit to mother was 91 million yuan, +11.12% year on year, net profit without return to mother 90 million yuan, +29.05% year over year.

The various businesses are well balanced. The company's revenue in 2023 was +1.1%/+16.7%/25.8% for high-end equipment/new nuclear energy materials and components, respectively. The gross margin was 30.8%/40.1%/41.9%. The overall gross margin was stable, and the contribution of nuclear energy and two aircraft was significant.

The dual-engine business and nuclear power business are impressive. In terms of two engines, various models in the gas turbine business have achieved key breakthroughs. In 2023, new orders exceeded 600 million yuan, domestic batches of recombustible blades were delivered, and strategic agreements were signed with leading international combustion engines. Aero engines accounted for more than 50% of the global market share of certain aero engine chassis supplied by Company G, and orders rolled over to 2026; the boom in nuclear power was high, and neutron absorption materials and composite shielding materials passed national certification.

The low-altitude economy is actively being developed. The company has completed the development of unmanned helicopters with a take-off weight of 270 and 1000 kg, and focused on completing the development and product certification of 600 kg drones in 24 years.

Profit forecasting and investment advice. We expect the company's net profit to be 433/5.54/694 million yuan for 24-26 years. Referring to the valuation level of comparable companies, considering the company's product positioning is high-end, highly competitive in high-end product fields such as aerospace and nuclear industry, and has an early layout in the “low altitude economy” and strong competitiveness, maintaining the company's reasonable value of 15.82 yuan/share and maintaining a “gain” rating.

Risk warning. The risk of macroeconomic uncertainty, the risk of exchange rate fluctuations, the risk of price fluctuations of major raw materials, etc.