Charging module business drives year-on-year increase in revenue and net profit to mother
In 2023, the company's revenue was 1.09 billion yuan, +57.8% year on year, net profit to mother of 103 million yuan, +131.3% year on year, after deducting non-net profit of 84 million yuan, +170.5% year over year, mainly driven by the charging module business. 1Q24 achieved revenue of 178 million yuan, +50.2%/-56.2% YoY, net profit to mother of $08 billion, or -51.2%/-78.7% YoY. Considering the company's increased R&D investment, we assume a slight increase in costs. We expect the company's net profit to be 1.54/2.30/379 million yuan in 2024-2026, respectively (the value was 169/250 million yuan 24-25 years ago). Referring to the consistent expectations of the comparable company Wind, the average PE value for 24 years was 21 times. Considering the company's leading position, or benefiting from industry pattern optimization and overseas dividends, the company was given a reasonable PE 23 times for 24 years, corresponding to a target price of 20.32 yuan, to maintain the “gain” rating.
The volume of charging modules has risen sharply, leading to a significant increase in the company's net profit
The company's revenue in 2023 was 1.09 billion yuan, +57.8% year-on-year, mainly driven by a year-on-year increase in revenue from the charging power supply business for charging and switching stations (mainly charging modules). Net profit attributable to mother was 103 million yuan, +131.3% year on year, after deducting non-net profit of 84 million yuan, +170.5% year over year. This was mainly due to the increase in the gross margin of charging power supplies in the company's charging and switching stations, as well as the increase in the dilution cost ratio due to scale effects. In 2023, the gross profit margin was 33.15%, +2.33pct year on year; the net profit margin was 10.17%, +3.30pct year on year, and profitability improved significantly. During the full year of 2023, the expense ratio decreased by 3.59 pct year on year to 21.50%, mainly due to a decrease of 1.95/1.41 pct in sales expenses ratio and a high year-on-year increase in revenue and the diluted expense ratio.
Charging modules continue to be iterated to speed up overseas deployment
In 2023, the company's charging power supply business revenue was 651 million yuan, +109.60% year-on-year, with a gross profit margin of 27.73%, compared to +12.06pct. The rapid start-up of the company's charging modules, scale effects, and cost reduction led to an increase in gross margin. The company has been deeply involved in charging modules for more than ten years, has a stable dominant position, and has achieved nine generations of changes. The company takes a two-pronged approach through R&D and process improvement to create a cost-effective product. The company introduced fully automated gluing production equipment and first introduced double-sided gluing for all products in the industry, greatly improving product reliability. The company's products have obtained CE certification and UL certification. Many products have entered the European and North American markets, and overseas customers are expected to contribute more in the future. With scaling+improved product structure+increased overseas share, there is plenty of room for improvement in the company's gross margin.
The revenue from the power grid business grew rapidly. The profitability of military power supplies remained high in 23, with grid industry business revenue of 177 million yuan, +36.9% year over year, gross profit margin of 38.69%, and +0.30pct year on year. Profitability remained stable. The aerospace industry's business revenue was 124 million yuan, -15.4% year on year, gross profit margin 52.29%, -0.57 pct year on year. Although profitability declined slightly year over year, it remained high. The transformation of the new power system is accelerating, and grid investment is expected to maintain a high growth rate. Among them, intelligent power grid construction has become the focus of investment, and the company is expected to benefit and maintain steady growth.
Risk warning: Sales volume of charging module products fell short of expectations, gross margin in overseas markets fell short of expectations, fluctuations in raw material prices and domestic substitution fell short of expectations.