Brief performance review
On April 26, the company released its annual report for the year 23 and the quarterly report for the year 24. Revenue in 2023 was 583 million yuan, +10.72% year on year; net profit to mother was 184 million yuan, +18.38% year on year; gross sales margin was 53.34%, -1.41PCT year on year; net sales margin was 31.9%, +0.35PCT year on year. 23Q4 achieved revenue of 161 million yuan, + -6.93% year on year; net profit to mother was 50 million yuan, +13.89% year over year.
24Q1 revenue was 142 million yuan, +7.6% year over year; net profit to mother was 49 million yuan, +1.22% year over year; gross sales margin was 51.51%, -7.98 PCT year on year, +2.13 PCT month on month; net sales margin was 34.86%, -1.21PCT year on year, +3.97PCT month on month.
Management analysis
The company's performance was in line with expectations, and the split was as follows:
(1) Revenue for 23 years split by business: 1) Valve transmission revenue of 410 million yuan, +10.03%, gross profit margin of 56.21%, year-on-year +3.12PCT, sales volume of 98.45 million units, +29.9% year-on-year; 2) Valve set precision parts of 89 million yuan, +10.73% year-on-year, gross profit ratio 68.29%, year-on-year +1.51 PCT, sales volume of 37,000 units, +5.2% year on year; 3) Revenue from other businesses was 78 million yuan, +12.55% YoY, gross profit margin - 18.5% YoY, YoY 29.24%, of which 7787 tons of cold-forged wire were sold, +55.74% year-on-year.
(2) Benefiting from improved capacity utilization and efficiency, and increased overseas profitability. The company's overseas gross profit margin was 51.41% in '23, +8.73 PCT compared to the previous year.
(3) Benefiting from interest on large deposit books, financial expenses have declined sharply. Interest income in '23 was about $13 million, an increase of about 4 times over the previous year. Sales/management/finance/R&D expenses in 24Q1 were 1.19%/17.55%/-1.96%/5.7%, year-on-year, -0.23PCT/ -1.85PCT/ -3.76PCT/ -1.7PCT, and -0.82PCT/-0.25PCT/+5.71PCT/+0.56PCT year-on-month.
The company's cash on hand remains stable, and the financial expense ratio is expected to remain low.
Profit Forecasts, Valuations, and Ratings
Benefiting from the release of new overseas orders and improved profitability of overseas Czech factories, the company's performance is expected to continue to increase. We are maintaining our 2024-2025 expectations and adding 2026 expectations. Revenue for 2024-2026 is expected to be 795/9.76/1.24 billion yuan, +36.2%/22.8%/23.4% YoY; net profit of 2.20/2.62/331 million, respectively, +19.17%/+19.08% +26.37% YoY, maintaining the “buy” rating.
Risk warning
Downstream sales fall short of the expected risk, the expansion of new projects falls short of the expected risk, the volume of humanoid robots falls short of the expected risk, and the risk of executive holdings reduction.