Event: The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved total operating income of 205.018 billion yuan, an increase of 7.82% year on year; realized net profit of 29.017 billion yuan, up 18.41% year on year, after deducting net profit of non-return to mother of 27.565 billion yuan, an increase of 14.92% year on year. The total revenue of 2023Q4 in a single quarter was 49.206 billion yuan, up 17.70% year on year; net profit to mother was 8.925 billion yuan, up 43.90% year on year, after deducting non-return net profit of 8.351 billion yuan, up 54.09% year on year. 2024Q1 achieved operating income of 36.596 billion yuan, an increase of 2.53% year on year; realized net profit of 4.675 billion yuan, an increase of 13.77% year on year, and net profit after deducting non-return to mother of 4.525 billion yuan, an increase of 21.5% year on year.
In 2023, the dividends remained as high as in previous years. In 2023, the cash dividend was 13.142 billion yuan, with a dividend ratio of 45%, the same as previous years.
The main air conditioning business grew steadily in 2023. In 2023, the company's revenue from air conditioning/household appliances/industrial products/smart equipment/green energy was 12.13%/-12.39%/31.63%/55.03%/51.16%, respectively.
Profitability increased year over year in 2023. Gross profit margin: In 2023, the company's gross margin increased 4.53pct year-on-year to 30.57%. Rate side: The 2023 sales/management/R&D/finance rate was 8.36%/3.21%/3.32%/-1.72%, with a year-on-year change of 2.42pct/0.42pct/-0.01pct/-0.56pct. The change in sales expenses is mainly affected by the increase in product installation and maintenance costs, and the change in financial expenses is mainly affected by the increase in interest income. Net interest rate: The company's net interest rate in 2023 changed 1.41pct year-on-year to 13.59%.
2024Q1 profitability increased year over year. Gross profit margin: 2024Q1's gross margin increased 2.04 pct year over year to 29.45%. Rate side: The 2024Q1 sales/management/R&D/finance rate was 7.32%/4.77%/4.09%/-2.52%, with a year-on-year change of 0.01pct/0.66pct/-0.24pct/-0.97pct. Net interest rate: The company's net interest rate in 2024Q1 changed 1.75pct year-on-year to 12.76%. Net interest rates are also affected by fair value change losses and credit impairment losses. 24Q1 fair value change loss was 86 million yuan, -153.16% year over year; credit impairment loss was 452 million yuan, -105.43% year over year.
2023Q4 cash flow is healthy and contract liabilities are declining. Cash flow: 23Q4 The company's net operating cash flow was $16.802 billion, +170.58% year-on-year. Of this, cash received from sales of products was $50.385 billion, +5.76% year-on-year. Contract liabilities: As of 23Q4, the company's contract liabilities were 13.589 billion yuan, -9.24% year over year and -42.67% month on month.
2024Q1 cash flow declined, and contract liabilities rebounded month-on-month. Cash flow: 24Q1 The company's net operating cash flow was $2,941 million, or -119.52% year-on-year. Among them, cash received from sales of goods was $33.459 billion, or -40.21% year-on-year. Contract liabilities: As of 24Q1, the company's contract liabilities were 20.491 billion yuan, -14.57% year-on-year, and +50.79% month-on-month.
Profit forecasting and investment advice. As a leader in the white power industry, the company's operating performance is steady. Considering the company's performance in the first quarter, we expect the company to achieve net profit of 322.46/352.73/37.964 billion yuan in 2024-2026, an increase of 11.1%/9.4%/7.6% year-on-year, maintaining a “buy” investment rating.
Risk warning: risk of macroeconomic fluctuations, risk of fluctuations in raw material prices, increased market competition.