Incident: In 2023, the company achieved operating income of 2,412 billion yuan, +9.75% year over year, and realized net profit of 280 million yuan after deduction, or +22.88% year over year. In Q1 2024, the company achieved operating income of 662 million yuan, +9.07% year-on-year, and realized net profit of 90 million yuan after deduction of non-return to mother, or +29.05% year-on-year.
“Two machines” + continuous release of nuclear power, breakthroughs in key models+applications. In 2023, the company achieved key breakthroughs in various models in the gas turbine business, with a new order amount exceeding 600 million yuan. It was the first to pass the inspection and batch delivery of new products for Class 1, 2, and 3 directional hollow turbine blades from the national “two-engine project”; in the field of aero engines, a certain type of aero engine chassis supplied to Company G accounted for more than 50% of the global market share. In the field of nuclear power, we actively expanded the application field of nuclear energy materials, successfully developed three key core components and extreme environmental functional materials high boron steel and tungsten boron steel, and established a joint venture in the first quarter of 2024 to gradually achieve industrialization. In the future, the company is expected to benefit from breakthroughs in “two-engine” and nuclear power business models and expansion in downstream application fields.
The company attaches importance to the low-altitude economy and aviation industry chain, and focuses on the layout of aircraft developers+drones. The company acquired German SBM in 2016, completed the introduction of two turboshaft engine technologies, and gradually expanded from the field of “two-plane” hot-end components to the field of complete aero engines and supporting helicopters and drones. The YLWZ-130/190 completed localized development and small-batch production within 2023; the first YLWZ-300 was delivered in the first quarter of 2024; the 120KW and 275KW hybrid packs target the drone freight, extended-range electric truck, and emergency rescue markets, and have been recognized by target customers. The company has completed the development of unmanned helicopters with a take-off weight of 270 kg and a take-off weight of 1000 kg. In 2024, it will focus on completing the development and product certification of drones with a take-off weight of 600 kg.
High dividends+management holdings+repurchases and cancellations. The company has long attached importance to shareholder returns and is committed to high-quality development. Since the company went public in 2014, the company's cumulative cash dividends have exceeded 428 million yuan, and the dividend ratio has exceeded 30% of the net profit of the listed company every year; the company's actual controllers, management, and core employees have increased their cumulative holdings by more than 550 million yuan; the company has also used centralized bidding transactions to repurchase 4.114 million shares of the company's shares for cancellation, using 52 million yuan in capital. In the future, the company will comply with the relevant requirements of the State Council's “Article 9” and continue to return investors through various methods such as cash dividends and repurchases and cancellations, and promote the high-quality development of listed companies.
Profit forecast: Based on the company's continuous expansion of new products and applications in the “two machines” and nuclear power fields, and the high trend in the downstream market, we expect the company's net profit to be 4.17/4.95/600 million yuan in 24/25/26, respectively, and the corresponding PE is 26.49/22.31/18.42 times, respectively. Maintain a “buy” rating.
Risk warning: related projects fall short of expectations, international trade situation worsens, ongoing projects fall short of expectations