Matters:
Coli Sensor disclosed the 2023 annual report and 2024 quarterly report: in 2023, it achieved revenue of 1,072 million yuan, and realized net profit of 312 million yuan, +20.11% year on year; in the first quarter of 2024, the company achieved revenue of 248 million yuan, +12.89% year over year, and realized net profit of 43 million yuan, or -23.13% year on year.
Commentary:
Revenue grew steadily, and gross margin hit a three-year high in 2023. In 2023, the company's gross margin and net margin were 43.05%/31.27%, respectively, +2.81%/+5.28% year-on-year; the company's sales/management/R&D/finance expenses ratio was 5.10%/6.90%/9.13%/1.52%, respectively, which remained stable overall. In 2024, the company's gross margin and net margin were 43.36%/20.30%, respectively. The gross margin continued to improve. The decline in net profit attributable to mother was mainly due to an increase in sales expenses of new consolidated subsidiaries and a decrease in the fair value of the participating subsidiary Chicheng shares at the end of the period.
The new business structure anchors the company's determination to develop multiple physical sensors. The 2023 Annual Report showed four new business segments: mechanical sensors and instruments with revenue of 663 million yuan, +1.20% year over year, gross profit margin of 41.39%, +4.99%; other physical sensors revenue of 0.13 billion yuan, gross profit margin of 23.19%; industrial IoT and system integration revenue of 314 million yuan, gross profit margin of 48.30%; and platform products revenue of RMB 14 million, gross profit margin of 34.95%. The company's multi-physical sensor integration has become one of its core competencies, and is expected to break through the parent company's traditional load sensors and IoT products.
“Endogenous+extrinsic” investment and mergers and acquisitions initially established the strategic form of Ke Li's “sensor forest”. In 2023, the company accelerated the pace of investment and layout, successively completed strategic investments in 11 projects, laid out more than 10 sensors such as mechanics, electricity, optical fiber temperature measurement, gas, flow, and light curtains, and initially established the foundation for a sensor forest. 1) Self-research: The company has continuously consolidated its leading edge in mechanical sensors. Starting with load sensors, the company has developed and prototyped multi-dimensional force sensors, torque sensors, miniature force sensors, etc., leading the company mainly from the traditional weighing scale industry to industries with broader market prospects such as robots and high-end equipment. 2) Investment in mergers and acquisitions: In the field of non-mechanical sensors, the company has acquired electric power and optical fiber temperature sensors, and is participating in sensors such as flow, light curtains, CMOS laser measurement, spectral measurement, optoelectronics, and 3D, and will soon lay out robotic sensors such as smell and touch.
The “KMS Group Management System” guides the entire intelligent manufacturing process and builds core advantages. The company proposed the “KMS Group Management System” focusing on post-investment integration to maintain stability and reduce the failure rate, to promote the development of the group strategy in a deeper direction. In 2023, the company established and formed the “Eight Empowerment Centers”, clarified the “four new” sensors (robot sensors, multi-physical sensors, flexible tactile sensors, torque sensors) to focus on in the future, and steadily promoted the three major industrial parks of Ningbo, Zhengzhou, and Shenzhen. In terms of cost control, the company innovates cost management systems to enhance profitability; in terms of market network, the company has customers in the international market in more than 100 countries or regions on five continents; in terms of brand building, the company implements differentiated brand strategies to build high-end brands SNK, mid-tier brand OAP, and cost-effective brand KELI, which has a high popularity in the industry.
Investment advice: Considering changes in the company's product structure and manufacturing sentiment falling short of expectations, we slightly adjusted the company's profit forecast. The company's revenue for 2024-2026 is 12.54 (previous value 14.90), 15.46 (previous value 18.21), and 19.33 billion yuan, respectively; net profit to mother is 3.83 (previous value 3.86), 4.83 (previous value 4.84), and 606 million yuan EPS; 1.36, 1.71, and 2.15 yuan, respectively. Considering that ① Company has laid out more than 10 sensors through self-development and epitaxial investment and mergers and acquisitions, and through the cultivation and empowerment of the KMS Group management system, it has initially established a foundation for a sensor forest. ② Following the main investment direction of robotics, tactile, vision, and inertial sensors, the company adheres to the overall investment strategy of “two highs and one low” (high quality, high return, low risk) in line with the direction of integrating various physical sensors, and strives to lay out and cultivate 5 to 8 sensors and industrial automation throughout 2024. It was given 30 times PE in 2024, and the corresponding target price was 40.8 yuan, maintaining the “strong push” rating.
Risk warning: increased market competition; risk of fluctuations in raw material prices; risk of new product development falling short of expectations; risk of changes in the international market.