Higher year-on-year increase after deducting non-net profit in 1Q24
In 1Q24, the company achieved revenue of 468 million yuan, +23.88% year on year, net profit to mother of 112 million yuan, -6.79% year on year, net profit without return to mother of 138 million yuan, +42.33% year on year. We maintain our profit forecast. We expect the company's net profit to return to mother in 24-26 of 616/725/875 million yuan. Referring to the average PE 12 times the company's 24-year Wind consensus forecast, considering that the future growth of the company's charging pile business is high, the company is 13 times the target PE for 24 years, corresponding to a target price of 15.73 yuan (previous value of 15.85 yuan), maintaining the “increase” rating.
Gross margin increased year-on-year, and the fee reduction effect was remarkable
The company achieved revenue of 468 million yuan in 1Q24, +23.88% year over year. It is estimated that the recovery in demand in the electricity meter business led to performance growth. Net profit to mother was 112 million yuan, -6.79% year over year, mainly due to non-recurring fair value changes and loss of 40 million yuan, after deducting net profit of 138 million yuan from non-return mother, +42.33% year over year.
The 1Q24 company achieved a gross profit margin of 41.39%, +2.63/-5.74pct, maintaining a high level; a net profit margin of 23.31%, and -8.30/-8.31pct month-on-month, mainly due to profit disturbances due to changes in fair value. The cost ratio for the 24Q1 period was 6.78%, -4.09pct year on year. Among them, sales, management, R&D, and finance expenses rates were -0.17pct, -1.93pct, -2.05pct, and +0.07pct, respectively. The company's overall expense ratio declined year-on-year, showing good cost control capabilities.
Deeply involved in the smart meter business, the State Grid smart meter procurement continues to win the bid for smart meters as the company's main source of revenue. The company has been deeply involved in the smart meter business for a long time. It began expanding its own brand electric energy meter business in 2006 and has obtained domestic and foreign product certifications one after another. The advantages in technology and customer resources are obvious. The main customers in the company's smart meter business are the State Grid and the South Grid. Since December '23, they have repeatedly announced that they have won and pre-bid for the procurement of State Grid and South Grid metering equipment, with a total amount of 679 million yuan. The products include Class A single-phase smart energy meters, Class B three-phase smart energy meters, concentrators and collectors, and special variable acquisition terminals. As old electricity meters from the State Grid and South Grid enter the replacement cycle and demand for tenders increases, the company is expected to benefit.
Charging stations actively enter overseas markets
The company's charging pile business had an early layout in terms of overseas channels and certifications. Currently, corresponding channels have been set up in Europe and the US. The subsidiary LOGAREX is used as a sales platform and cooperates with overseas car companies in the form of OEM.
The company has obtained European CE certification and US ETL certification for AC piles. An American standard AC charging pile has been approved by end customers and is promoting UL certification. Overseas markets have good profitability and are expected to contribute to increased performance.
Risk warning: Smart meter shipments fall short of expectations; profitability declined due to increased competition in the industry; charging pile shipments fell short of expectations.