2023 Annual Report and 2024 Quarterly Report: Rapid growth in the charging module business. The company released the 2023 annual report and the 2024 quarterly report. In 2023, the company achieved operating income of 1,009 million yuan, +57.80%; achieved net profit to mother of 103 million yuan, +131.26% year over year; achieved net profit of 84 million yuan without return to mother, +170.46% year over year. 2024Q1 achieved operating income of 178 million yuan, +50.17% year over year; achieved net profit of 7.69 million yuan, or -51.21% year over year; realized net profit deducted from mother of 6.84 million yuan, +60.72% year over year.

The company's charging modules are expected to fully benefit from industry demand. We have adjusted our 2024-2025 profit forecast. We expect the company's 2024-2025 net profit to be 1.75 million yuan and 285 million yuan (originally 2.23 billion yuan and 356 million yuan), respectively. The net profit for 2026 is 443 million yuan, and EPS is 1.01, 1.64, and 2.55 yuan/share, corresponding to the current stock price PE at 19.3, 11.8, and 7.6 times, respectively, maintaining the “buy” rating.

The profitability level of charging modules has increased dramatically

In 2023, the company's overall gross margin and net margin were 33.2% and 10.2%, respectively, +2.3/+3.2pct.

By product, in 2023, the company's charging module business achieved operating income of 650 million yuan, +109.60% year-on-year, gross margin of 27.73%, or +12.06pct; power operating power supplies achieved operating income of 180 million yuan, +36.93% year-on-year, and gross margin of 38.69%, or +0.3 pct year-on-year. The company's charging module business continues to benefit from industry demand, rapid revenue growth, and the company continues to invest in R&D resources to iterate products and continuously improve product competitiveness in terms of product power density, efficiency, protection, stability, and noise.

Overseas markets continue to develop, and growth can be expected

In 2023, the company achieved overseas revenue of 54 million yuan, +122.92% year-on-year. The company continues to explore overseas markets, increasing marketing investment and customer development efforts in Europe, America, Southeast Asia and other regions. In terms of product certification, the company's products have obtained CE certification and UL certification, and many products have entered the European and North American markets.

Risk warning: Competition in the charging pile industry has intensified, and the progress of going overseas falls short of expectations.