Incident Overview
The company released its 2023 annual report and quarterly report. In 2023, the company achieved revenue of 4.519 billion yuan, yoy +1.96%, net profit to mother of 496 million yuan, yoy +14.17%, net profit of 489 million yuan after deducting non-return to mother net profit of 489 million yuan, yoy +12.35%, gross profit margin of 21.32%, yoy+2.
49pct, net profit margin 10.33%, yoy+1.27pct.
The company achieved revenue of 1.17 billion yuan in 23Q4, yoy +7.43%, qoq -2.34%, net profit to mother of 121 million yuan, yoy -10.92%, qoq -32.02%, net profit net profit of 123 million yuan, yoy -10.47%, qoq -29.31%, gross profit margin 24.87%, yoy-1.5pct, qoq+0.34pct, net profit margin 9.7%, yoy-1.99pct, qoq-4.69pct.
The company achieved 24Q1 revenue of 1,093 million yuan, yoy +7.71%, qoq -6.58%, net profit to mother of 109 million yuan, yoy+44.
73%, qoq — 9.92%, net profit without return to mother of 108 million yuan, yoy +45.9%, qoq -12.2%, gross profit margin 20.48%, yoy+1.45pct, qoq-4.39pct, net profit margin 9.44%, yoy+2.75pct, qoq-0.26pct.
The increase in net profit from the company's revenue was mainly due to 1) introducing high value-added products and optimizing the product structure; 2) overseas sales accounted for a relatively high share of foreign exchange revenue; 3) the decline in the prices of some raw materials reduced the company's production costs.
Focus on automotive PCBs to create new highlights in the digital communication field
1) The company lays out automotive PCBs as a key development area. With years of production and technology accumulation in the automotive PCB field, the company has been able to supply new energy vehicles for brands such as Tesla, BMW, Volkswagen, Porsche, Chrysler, Mercedes-Benz, Xiaopeng, GAC, and Great Wall. The company will continue to introduce new customers, new models and new products, continuously improve the compatibility of technology and production capacity, and the foundry company's leading position in the global NEV PCB field. At the same time, the company's cooperation with leading customers in the international technology industry has been further deepened. Since 2019, it has become the company's largest automotive terminal customer. In 2021, the company signed a procurement and supply agreement with it to better cope with the supporting supply required for the commissioning of its Berlin plant in Germany and its new plant in Austin, USA to release production capacity. At the same time, it has entered its supply chain for new products such as photovoltaics and energy storage based on the same technology development. 2) In the digital communication field, the company has achieved mass production capacity for 24-layer hard boards, 5-stage HDI (including any layer interconnection), 6oz thick copper multi-layer boards, multi-layer soft boards, and multi-layer HDI soft and hard combination boards, which have basically covered the process requirements of PCBs required for mainstream AI servers. In addition, in 2020, the company began cooperating with customers to develop and test related PCB products for self-developed supercomputer system projects. By accumulating years of high-multi-layer and high-density interconnected hard board technology and quality control of vehicle standard products, the company has gained the trust of customers. Currently, the project is officially mass-produced, and the company has become its main PCB supplier. The project has accumulated successful production experience in AI server-related PCB products for the company. The company is currently actively importing other AI server leading customers. The company has successfully passed the certification of Amazon and other customers, and has also entered Nvidia's supply chain system through OEM. The digital communication business is expected to develop rapidly in the future.
Investment advice
Considering future macroeconomic uncertainty and increased competition in the industry as a whole, we expect the company's net profit to be 6.04/7.17/836 million yuan in 2024/2026 (previously estimated net profit to be 649/785 million in 2024/2025). According to the 2024/4/26 closing price, PE will be 19/16/14 times, maintaining the buying rating.
Risk warning
New production capacity fell short of expectations, downstream demand fell short of expectations, industry competition intensified, raw material prices fluctuated, and the risk of fluctuations in the surrounding environment.