Core views:
Event: The company announces the 2023 Annual Report and the 2024 First Quarter Report. In 2023, realized revenue and net profit to mother were 21.04 billion yuan and 186 million yuan respectively, up 44.69% and 1.21% year on year; in the first quarter of 2024, realized revenue and net profit to mother were 5.78 billion yuan and 56 million yuan respectively, up 3.21% and 10.36% year on year.
Revenue grew rapidly in 23 years, and foreign trade business demand was strong. In a single quarter, 2023Q4 revenue and net profit to mother were $393/018 million (YoY -15.29%/-62.35%), respectively. By product, in 2023, the company achieved revenue of 15.01/0.82/1.66/2.40/ 022 million yuan (YoY +38.28%/-16.63%/+243.23%/37.58%/42.53%) for aviation forgings/aerospace forgings/gas turbine forgings/other forgings, respectively. The gross margins of the corresponding sub-business were 29.22%/30.31%/17.83%/29.22%/27.24%, respectively. Among them, the company actively expanded its gas turbine business in 23 years, gas turbines The machine forging business saw a high increase in revenue. By region, the company's overseas revenue in 2023 was 610 million yuan, up 92.34% year on year. The international aero engine market recovered strongly, and the company's foreign trade business revenue soared and hit a new high in recent years. On the cost side, the cost ratio decreased by 1.23pct to 13.69% year-on-year during the 23-year period, and the company's sales/management/finance/R&D expense ratios were 1.58%/6.96%/1.25%/3.90% (YOY-0.25/+0.01/-0.17/-0.82pct), respectively. The cost control results were obvious. The overall downstream domestic market of the company is growing steadily, and overall foreign demand is strong. Overseas business accounts for more than 30% of the company's total revenue, and it is expected to continue to increase in the future. According to the annual report, the company's on-hand orders continued to grow. By the end of 2023, the total number of on-hand orders was about 4.868 billion yuan. Among them, the company signed a number of overseas long-term cooperation orders to actively expand overseas markets.
Profit forecast and investment advice: EPS is expected to be 2.09, 2.93, and 3.76 yuan/share in 2024-26, respectively, maintaining a reasonable value of 43.59 yuan/share, corresponding to 21 times PE in 24, maintaining a “gain” rating.
Risk warning: Risk of fluctuations in raw material prices, low delivery expectations, policy adjustments, etc.