occurrences
On April 25, 2024, the company released its quarterly report for the year 24. 1Q24 achieved operating income of 243 million yuan, a year-on-year decrease of 31.96%; realized net profit to mother of -69 million yuan, and losses increased 78.24% year on year.
The company's industrial robot and intelligent production line business revenue declined in the first quarter, affecting overall performance: 1Q24's industrial robot and intelligent production line business revenue was 65 million yuan, down 70.95% year on year, mainly due to the impact of ongoing orders related to the company's new energy power battery intelligent equipment business. As of the end of the first quarter of '24, the company's intelligent production line had on-hand orders of 853 million yuan. At the same time, according to the company's announcement on April 17, '24, the company's holding subsidiary Changzhou Huashu Jinming signed a total of 505 million yuan (tax included). We believe that the first quarter was mainly affected by the confirmation cycle. Currently, there are sufficient orders in hand, and there is strong certainty that the robotics sector will return to high growth in the future.
In the first quarter, the revenue of the CNC system sector maintained high growth, and the core business performed well. 1Q24's CNC system and machine tool business achieved revenue of 163 million yuan, a year-on-year increase of 42.15%, and excellent performance. According to the company's annual report, the company's high-end CNC system cooperates with companies such as Shandong Haomai, Dongguan Evermi, Wuzhong Machine Tool, Tianshui Starfire, Ningjiang Machine Tool, Fujian Weino, Ningbo Haitian and other companies. Currently, the trend of continuous increase in customer coverage is quite clear. Domestic substitution of high-end CNC systems is expected to accelerate, and the company's CNC system sector continues to grow at a high rate throughout the year.
The “AI Empowerment” of the Huazhong Type 9 CNC System further strengthens product capabilities. According to the company's official WeChat account information, on April 9, '24, the company held its 30th anniversary flagship product launch with “AI Empowerment, Five-axis Leadership, and Composite Upgrades”. The HNC-948 Huazhong 9 CNC system exhibited by the company won the Chunyan Award at the CCMT2024 China CNC Machine Tool Exhibition. According to information from the China Machine Tool Industry Association, the Huazhong Type 9 intelligent CNC system is the world's first truly intelligent CNC system with the ability to learn independently and optimize compensation. The system provides a machine tool command domain big data aggregation access interface, a “digital twin” data management interface for the entire life cycle of the machine tool, and an algorithm library for big data intelligence (visualization, big data analysis, and deep learning). It provides an open technology platform for building an ecosystem of R&D models and business models co-created, shared, and shared with intelligent machine tools, and “AI empowerment” further strengthens the company's product capabilities.
It is expected to achieve net profit of 1.07/1.61/217 billion yuan from 24 to 26, corresponding to the current PE60X/40X/30X. Considering the high revenue growth in the company's CNC systems sector, the growth prospects for high-end CNC systems in particular are broad, maintaining a “buy” rating.
Risk warning
Domestic substitution progress falls short of expectations, economic recovery falls short of expectations, and risk of asset depreciation.