The company's 2023 annual report and 2024 quarterly report have outstanding performance and outstanding product strength. The company released the 2023 annual report and the first quarter report of 2024. The company achieved revenue of 938 million yuan for the full year of 2023, an increase of 25.28%; achieved net profit of 80 million yuan, a year-on-year decrease of 40.39%; and realized net profit deducted from non-return to mother of 76 million yuan, an increase of 73.25% over the previous year. In the first quarter of 2024, the company achieved revenue of 248 million yuan, a year-on-year increase of 46.97%; achieved net profit of 39 million yuan, an increase of 403.1%; achieved net profit withheld from mother of 38 million yuan, an increase of 373.75% over the previous year; the company continued to promote internationalization strategies and expand production and reduce costs significantly.
The overall cost control capability is adequate, and cost reduction and efficiency improvements are ongoing. The company's expense ratio for the full year of 2023 was 24.78%, of which the sales expense ratio was 7.10%, +0.47pct; the financial expense ratio was 0.02%, -2.09pct; the R&D expense ratio was 3.72%, -0.05pct year on year; the management expense ratio was 13.94%, +2.45pct year on year; mainly due to the increase in depreciation in the company's new factory area and the increase in the payment of share expenses in the employee stock ownership plan. The company's expense ratio for the first quarter of 2024 was 19.52%, of which the sales expense ratio was 5.97%, -1.41pct; the financial expense ratio was -2.88%, -15.69pct; the R&D expense ratio was 3.37%, -1.75pct; and the management expense ratio was 13.06%, -4.05pct year on year, with significant cost reduction and efficiency effects.
“Decrease in raw mineral taste+increased penetration rate of rubber wear-resistant spare parts+spare parts consumables attributes+Belt and Road trips” continued to accumulate energy for the company's performance. The company has long focused on the application of new polymer composite materials in the field of mineral processing. Self-developed rubber wear-resistant spare parts are superior to traditional metal spare parts in terms of life, weight, and environmental performance, and rubber wear-resistant spare parts continue to replace traditional metal spare parts. In the future, as raw ore is gradually mined and the taste of remaining mines declines, demand for mining rigs will be higher and higher when mining volume is steady every year, and as Chinese mining companies continue to go overseas, the company is expected to fully benefit as a domestic rubber composite spare parts leader, and the company's long-term trend is improving.
Profit forecast and investment advice: We expect the company to achieve revenue of 13.92/17.62 billion yuan in 2024-2026, with year-on-year growth of 48.4%/26.6%/23.0%, respectively. The PE corresponding to the current stock price is 27.4/19.9/14.1X. Considering the company's long-term trend in the future, we will continue to maintain a “buy” rating.
Risk warning: The penetration rate of rubber wear-resistant spare parts fell short of expectations, overseas customer development fell short of expectations, and EPC project delivery fell short of expectations.