Announcement summary: The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 2,678 billion yuan, a year-on-year increase of 19.77%, net profit of 449 million yuan, a year-on-year increase of 24.32%, after deducting net profit of 372 million yuan, up 31.05% year on year; 2024Q1 revenue of 617 million yuan, up 20.53% year on year, net profit to mother of 103 million yuan, up 40.42% year on year.
Performance continued to expand steadily, and profitability improved. The company's 23Q4 revenue in a single quarter was 853 million yuan, +8 yuan year-on-year.
4%, +38.17% month-on-month, net profit of 166 million yuan, +18.36% year-on-year and +55.57% month-on-month. All four major sectors grew year-on-year. Revenue from construction and infrastructure/geospatial information/resources and publicities/robots and autonomous driving was 966 million/425 million/1,127 billion/ 160 million yuan respectively, +5.29%/41.29%/61.64% year-on-year. The agricultural machinery autonomous driving market advantages continued to be consolidated, and universal disaster monitoring equipment covered more than 10,000 disaster hazard sites. In total, 10,000 sets of monitoring equipment were installed in more than 1,000 reservoirs across the country to expand monitoring and early warning of microdeformation in mines, traffic roads, etc.; robots and autonomous driving sectors High increase Relying on the core advantages of integrated navigation algorithms, the company developed terminals such as high-precision, high-dynamic positioning, and attitude measurement receivers, combined with the self-developed global satellite and earth integration enhanced network service platform to create an integrated solution. It cooperated with Easy Control, Sany, Xugong, etc. in the fields of low-speed robots, mining vehicles, ports, logistics autonomous driving, etc., and began batch delivery of autonomous passenger cars. The gross profit margin for the whole year was 57.8%, +1.13pct year on year, benefiting from comprehensive cost reduction strategies such as procurement and R&D, self-developed core components, optimized product design. The period cost ratio was 44.32%, -1.27pct year on year, net interest rate 16.57%, and the total cash dividend was 191 million yuan, with a dividend ratio of 42.47%, up 2.2 pct year on year. The 24Q1 growth trend continued. The gross profit margin was 58.8%, a slight decrease year on year, and the cost ratio for the period was 44.27%, down 3 year on year.
05pct, net profit margin was 16.29%, up 0.93pct year on year, and profitability was further enhanced. The company's target net profit for 2024 was 550 million yuan, an increase of about 25% year on year. The scale of performance is expected to benefit from accelerated application and market expansion.
Overseas business is growing rapidly, and we are actively expanding emerging applications such as the low-altitude economy. The company focuses on key industry markets, increases market share, adheres to the marketing strategy of “globalization, exploits products, and embraces change”, and establishes a national marketing system and international dealer network with equal emphasis on direct sales and distribution. Currently, it has sales subsidiaries in major domestic provinces, and branches in 8 countries and regions including the United States and Southeast Asia. Overseas markets have broad prospects, and there are many opportunities brought by national infrastructure and regional economic cooperation. Using its leading position and experience in the domestic market, the company has built an open and accelerated growth “Partner+China Test” partner system. With its high cost performance advantages, the corresponding revenue and share have increased rapidly in recent years. Foreign business revenue in 2023 was 7.2 billion yuan, an increase of 47.51% year on year, and the share of overall revenue increased to 26.85%. The gross profit margin of 72.67%, significantly higher than the domestic market gross margin of 52.3%, strongly driving the company's overall operation The growth rate of profit collection. High-precision positioning is the foundation of information in the intelligent era, and market demand and development space is expected to open up further. The company has formed various intelligent equipment and system solutions for high-precision positioning and navigation, including surveying and mapping RTK, 3D lidar, drone ships, etc., and has developed software such as point cloud preprocessing/post-processing to enhance intelligent hardware upgrade capabilities. It is expected that high-precision navigation technology can be integrated with emerging markets such as autonomous driving, smart cities, and low-altitude economy to further broaden the business field.
Increase investment in R&D and enhance core competitiveness. The company invested 460 million yuan in R&D in 2023, accounting for 17.25% of revenue, maintaining a high level. It mainly invested in various R&D strategic projects such as high-precision positioning chips, high-precision positioning products for autonomous passenger cars, and cloud homogenous algorithms. It established 5 R&D bases in Shanghai, Wuhan, Nanjing, Beijing and the UK at home and abroad to give full play to the talent advantages of regional universities. By the end of 2023, the R&D team was 615, accounting for 33.35% of the number of employees. Focusing on the core of high-precision navigation and positioning technology, the company gradually built two core technology moats, a high-precision positioning chip technology platform and a global satellite and ground integrated network service platform. It has complete algorithm technical capabilities such as high-precision GNSS algorithms, 3D point clouds and aerial surveying, GNSS signal processing and chipization, autonomous driving perception and decision control, etc., to build IoT and cloud service platforms, spatial information application software, etc., focusing on core basic components such as GNSS chips, OEM boards, antennas, etc., to further enhance high-precision GNSS algorithms, integrated navigation, and SWAS With core technical advantages such as domain enhancement and precise tracking, the high-precision GNSS baseband chip “Xuanji” has been developed and mass-produced to continue to strengthen the autonomy and control of the industrial chain. In the future, it will continue to invest in basic device R&D and promote the improvement of technologies, products and solutions such as high-precision positioning, integrated navigation, mechanical automation control, and lidar systems to enhance the degree of integration of products and services, accelerate large-scale application of product solutions for emerging markets, and create benchmark projects.
Investment advice: Huazu Navigation is a leading high-precision navigation and positioning leader. It provides customers with hardware equipment and solutions for different scenarios, masters core algorithms, realizes self-development and self-sufficiency in upstream core infrastructure devices, and gradually develops new business models such as SaaS subscription services, which is expected to improve profitability. As the demand for high-precision positioning in traditional industries escalates, emerging scenarios such as automotive and low-altitude economy expand smoothly. Combined with opportunities to go overseas, incremental space will be further opened up. We expect the company's net profit for 2024-2026 to be 576 million yuan/763 million/941 million yuan, respectively, and EPS of 1.06 yuan/1.40 yuan/1.73 yuan respectively, maintaining the “buy” rating.
Risk warning: Downstream application demand falls short of expectations; risk of increased industry competition; risk of technology iteration; risk of deviation in industry size measurement; risk of exchange rate fluctuations; risk of information delays or untimely updates of public data used in research reports.