Incident: The company released its report for the first quarter of 2024. The first quarter achieved operating income of 206 million yuan, an increase of 54.72% over the previous year; net profit to mother was 1.3435 million yuan, compared to -28.4947 million yuan in the same period last year.
The business scale of the company has expanded, and its profitability has improved
2024Q1, the company achieved operating income of 206 million yuan (+54.72%), net profit to mother of 1.3435 million yuan, and -28.4947 million yuan in the same period last year, in line with market expectations. In addition, the company's 24Q1 gross sales margin was 41.25% (-7.37pcts), the net margin was 0.65% (+22.08pcts), and the period expense ratio was 53.49% (-19.77pcts). Among them, the sales expense ratio was 10.30% (-0.60pct) and the R&D expense ratio was 26.45% (-4.55pcts), which improved profitability; the company's total R&D investment was 54 million yuan (+32.01%).
In addition, the company's contract debt at the end of Q1 was 35 million yuan, up 41.74% from the beginning of the period; inventory was 607 million yuan, up 17.91% from the beginning of the period; prepayments were 45 million yuan, an increase of 88.06% over the beginning of the period, indicating that the company has sufficient downstream orders, increased demand for raw materials, and is actively preparing goods.
Competition in the industry intensifies, but downstream demand continues to grow
In 2023, as a leader in the domestic metal 3D printing industry, the company continued to explore new markets and application areas. Among them, the customized product business achieved revenue of 628 million yuan (+34.45%); the equipment business achieved revenue of 529 million yuan (+26.46%), equipment sales volume was 242 units (+42.35%), and the average equipment price was 2.185 million/unit (-11.16%). We think the main reason is that the price drop is due to increased competition in the industry; revenue from printing raw materials is 64 million yuan (+98.97%), we think the main reason The powder revenue base is low, and downstream application scenarios and printing requirements are gradually increasing.
With the implementation of the fixed increase project, production capacity will be further increased to meet growing downstream demand. In August 2022, the company announced a targeted increase plan to raise no more than 3.109 billion yuan, of which 2,509 billion yuan was invested in a large-scale intelligent production base project for metal additive manufacturing. The project is expected to be ready for use in December 2025; in December 2023, the company has completed the fixed increase, and actually raised a total of 3,029 billion yuan. The degree of application in China's 3D printing market continues to deepen, and the additive manufacturing market will continue to grow rapidly in the future. We believe the company's production capacity will be further increased to meet growing downstream demand.
Profit forecast: The company is a leading domestic metal 3D printing company, and medium- to long-term results can be expected. The company's net profit from 2024 to 2026 is estimated to be 3.20, 5.02, and 697 million yuan, corresponding EPS is 1.65, 2.59 yuan, and 3.59 yuan, and corresponding PE is 48.45, 30.85, and 22.23 times, respectively. It is covered for the first time, giving it a “recommended” rating.
Risk warning: core competitiveness risk, risk of concentrated downstream customer areas, risk of reliance on imports of key core devices, risk of bad accounts receivable.