The company achieved operating income of 2.35 billion yuan in 2023, an increase of 39.75% over the previous year, net profit of 282 million yuan, an increase of 327.53% over the previous year; net profit after deduction was 215 million yuan, an increase of 604.12% over the previous year. It is proposed to distribute a cash dividend of 2 yuan for every 10 shares, for a total of 119 million yuan in cash dividends, with a dividend ratio of 42.13%.
2024Q1's revenue was 295 million yuan, a year-on-year decrease of 30.29%; net profit to mother - 15.013,900 yuan, a year-on-year decrease of 134.03%; net profit after deduction - 15.112 million yuan, a year-on-year decrease of 135.96%.
Key points of investment:
Completed projects and revenue increased significantly in 2023. Demand for the domestic cultural tourism market and offline experience business picked up markedly in 2023. The country vigorously expanded the new digital cultural tourism business and actively promoted the release of backlog demand in the early stages and the implementation of new projects. The company's performance also rebounded significantly. Operating revenue increased by 39.75%, gross margin increased by 2.76 pcts, and net profit to mother increased by 604.12%. Looking at the breakdown, the company's urban digital experience space business revenue was 844 million yuan, up 30.53% year on year, gross profit margin was 34.11%, up 7.08pct year on year; cultural and brand digital experience space revenue was 1,394 billion yuan, up 40.37% year on year, gross profit margin 25.43%, down 0.65 pct year on year; revenue from digital products and services was 112 million yuan, up 167.23% year on year, and gross profit margin was 53.56%, down 0.31 pct year on year.
Vigorously expand the new digital cultural tourism business. In 2023, tourism hotspots in Zibo, Harbin and other places are constantly emerging, and the offline experience economy is in strong demand. The company seized opportunities such as “cultural tourism fever” and “museum fever” to establish the Fengyuzhu New Cultural Tourism Research Institute to vigorously expand the new digital cultural tourism business. The total amount of new orders signed by the company in 2023 was about 2,649 billion yuan, an increase of 1,063 billion yuan over 2022. By the end of 2023, the company had an active order balance of 4.489 billion yuan. In 2024, the company also won bids for projects such as the digital construction of the Baisha Mural Scenic Area in Yulong County, Lijiang City, the Jincheng City Exhibition Hall project, and the “Heart of High Speed Rail” in Suzhou.
The second growth curve for cultivating the integrated development of VR/MR and AIGC. The company established the MR Research Institute to focus on spatial computing and VR/MR technology applications to explore immersive innovative experiences in the fields of cultural expo, cultural tourism, and exhibition. In the future, the company will rely on the MR Research Institute to enhance research and development in spatial computing technology, and strive to accelerate the integration of VR and MR technology with AIGC technology, promote the application of interactive digital content, VR/MR and AIGC technology in different fields such as culture, museums, and tourism, and eventually form B-side VR/MR cultural tourism products and C-side VR/MR exhibition experiences, providing new impetus for the company's growth.
Seize opportunities for urban renewal and development. The “14th Five-Year Plan for the Development of Cultural Industries” proposes to encourage the development of the cultural industry using existing space such as historic buildings, industrial heritage, old factories, old neighborhoods, and old warehouses in the city. The company actively grasps new digital cultural tourism business opportunities in urban renewal scenarios, and uses cutting-edge digital technologies such as VR/MR, naked eye 3D, and AIGC to provide IP, content and operation services for urban renewal. In 2023, the company's renewal and transformation projects contributed 16.14% of revenue.
Project cycle factors put pressure on 2024Q1 results. 2024Q1 Due to climatic reasons and holiday factors, the company's project implementation progress is relatively slow. At the same time, the new digital cultural tourism business has strong operating characteristics and a relatively long cycle. As a result, the company's 2024Q1 completed projects were reduced, and operating income declined. At the same time, some operating costs and expenses were rigid, which led to an overall gross margin drop of 13.14 pct to 37.60% year on year. Various expense ratios increased to varying degrees, and net profit loss to mother was 1.513,900 yuan.
Profit forecast and investment rating: The company's 2024-2026 EPS is expected to be 0.52 yuan, 0.61 yuan, and 0.72 yuan. According to the closing price of 11.28 yuan on April 29, the corresponding PE is 21.63 times, 18.47 times, and 15.63 times, maintaining the “increase” investment rating.
Risk warning: government customer demand shrinks; accounts receivable repayment risk; industry competition intensifies