Event: The company released its 2023 annual report and 24Q1 quarterly report. In 2023, the company achieved revenue of 231.905 billion yuan, an increase of 8.35%; achieved net profit of 10.953 billion yuan, an increase of 19.53% over the previous year; net profit after deducting non-return to mother was 10.186 billion yuan, a year-on-year growth rate of 20.65%. With 2024Q1, the company achieved revenue of 52.407 billion yuan, an increase of 4.93% over the previous year, and achieved net profit of 2,471 billion yuan, an increase of 22.45% over the previous year; net profit after deducting non-net profit reached 2.283 billion yuan, a year-on-year growth rate of 23.23%.
Growth has been steady for 23 years, and business has gone hand in hand: against the backdrop of demand in the consumer electronics industry, the company still achieved steady growth in performance in 2023, verifying its solid moat of precision manufacturing and continuous expansion of horizontal and vertical capabilities. At the same time, the acquisition of Shishuo will further enhance the company's OEM share and position as a major customer. In the automotive business, the company continues to deepen cooperation with leading OEMs and automobile brand customers at home and abroad. The automotive business market demand is strong, and the performance growth rate remains 50% +. In terms of communications business, the company continues to cultivate, further develop customers, gradually build technical barriers, and maintain steady growth in business revenue.
The market continues to develop, and 24H1 performance is expected to increase: the company's consumer electronics business is expected to continue to expand in 2024, and new wearable products are worth looking forward to; the company's automotive business strengthens strategic cooperation with industry partner customers, and is expected to launch targeted projects one after another; the company's communications business collaborates with leading manufacturers to develop next-generation high-speed connection standards such as 800G and 1.6T, while continuing to strengthen technological innovation in the fields of optical/electrical connections, cooling systems, and power modules. Looking ahead to 24H1, the company's guiding profit range was $523 to 5.44 billion yuan, up 20-25% year on year, corresponding to Q2 performance of 27.6-2.97 billion yuan, up 18-27% year on year.
Investment advice: The company continues to cultivate the consumer electronics business, seize the historical opportunities of automotive electrification and intelligence, and build up for long-term growth in the AI wave. We expect the company's 2024-2026 net profit to be 137.27/171.40/20.476 billion yuan, EPS will be 1.91/2.39/2.85 yuan/share, and the corresponding PE will be 15.05/12.06/10.09 times, maintaining the “gain” rating.
Risk warning: risk of declining consumer electronics demand; risk of falling short of expectations in automotive and communications business development; risk of trade friction; risk of exchange rate fluctuations; risk of equity pledge; risk of high customer concentration.