PCB is still in the inventory removal stage, and the performance declined: in 2023, the company achieved revenue of 909 million yuan, -10.13%, of which PCB equipment revenue was 360 million yuan, 46.80%, accounting for 39.40%; revenue for special equipment in the field of new energy was 340 million, +111.79%, accounting for 37.35%; revenue for special equipment in the field of general hardware surface treatment was 160 million, +36.28%, accounting for 17.26%. The decline in revenue was mainly due to downstream customers still in the de-inventory stage, which had a temporary impact Due to demand for equipment expansion, equipment revenue in the PCB sector decreased; net profit to mother was 151 million yuan, -29.01% year on year; net profit after deducting non-return to mother was 135 million yuan, -32.39% year on year. 2024Q1 revenue was 197 million yuan, -15.73% year on year; net profit attributable to mother was 31 million yuan, or -38.72% year on year; net profit after deducting non-return to mother was 0.29 million yuan, -40.14% year over year.
Affected by the decline in gross margin of PCB equipment, profitability declined slightly: in 2023, the company's gross margin was 41.72%, -0.15pct, mainly due to a decline in PCB equipment gross margin. The gross margin of PCB equipment was 39.4%, -4.04pct year on year, gross margin of general hardware electroplating equipment was 27.7%, +3.9pct year on year, gross margin of special equipment in the field of new energy was 49.6%, +1.0pct year on year; net margin was 16.65%, -4.43pct year on year; the cost ratio for the period was 21.47%, YoY +2.48pct, of which the sales expense ratio was 7.93%, the year-on-year +1.15pct, the management expense ratio (including R&D) was 14.53%, +2.25pct year-on-year, and the financial expense ratio was -0.99%, and -0.92pct yoy. 2024Q1's gross margin was 39.11%, -6.05pct; the net margin was 15.69%, -5.89pct; the period expense ratio was 23.28%, +1.64pct yoy, of which the sales expense ratio was 7.57%, +0.17pct yoy, the management expense ratio (including R&D) was 16.3%, +1.69pct yoy, and the financial expense ratio was -0.59%, y-0.21pct yoy.
Contract liabilities & inventory declined: as of 2024Q1, the company's contract liabilities were 175 million yuan, -36.38% year on year, inventory was 398 million yuan, -1.51% year on year; 2024Q1's net cash flow from operating activities was -33 billion yuan, -223.24% year over year. Mainly due to a decrease in advance contract payments.
Composite fluid collector equipment & photovoltaic copper plating equipment are expected to bring new growth points: (1) Composite fluid collector equipment: The company has achieved large-scale mass production of composite copper foil equipment, and the first-mover advantage of the equipment is obvious. At the same time, it is actively laying out composite aluminum foil equipment and seeking to work in both directions on the positive and negative electrode material side of the composite fluid collector.
(2) Photovoltaic copper plating equipment: The third-generation photovoltaic electroplating equipment was delivered to the customer in early October 2023 and is currently being verified by the customer. At the same time, the company is also actively exploring other copper-silver technologies on the equipment side that can reduce costs and increase efficiency.
Profit forecast and investment rating: As a leading equipment provider, the company is expected to benefit from the industrialization of composite fluid collection. Considering the equipment acceptance process, we adjusted the company's net profit to the mother for 2024-2025 to be 2.8 (original value 4.2) /4.0 (original value 6.4) million yuan respectively. The estimated net profit to the mother in 2026 was 530 million yuan. The current stock price corresponding to the dynamic PE is 26/19/14 times, maintaining the “gain” rating.
Risk warning: Downstream production expansion falls short of expectations, and R&D progress falls short of expectations.