Core views:

The company released its 23 annual report and 24 quarterly report, and its performance continued to improve. The company achieved revenue of 840 million yuan in 2008, +31.69% year over year, realized net profit of 106 million yuan, +66.14% year over year, and realized net profit without deduction of 107 million yuan, or +85.94% year on year. Looking at the single quarter, 23Q4 achieved revenue of 248 million yuan, +39.28% year over year, and reached a new high of revenue in the single quarter; achieved net profit of 26.9 million yuan, +15.44% year over year, and achieved net profit without return to mother of 26.5 million yuan, or +21.59% year over year. The 24Q1 company achieved revenue of 223 million yuan, +46.39% year over year; realized net profit of 28.67 million yuan, +152.12% year over year, and realized net profit without deduction of 27.49 million yuan, or +152.10% year over year.

VIP board production and sales reached a record high in '23. Excluding factors such as cost calculation, the company's actual performance grew even more impressive. The annual report shows that in '23, the company produced 9.17 million square meters of VIP boards and sold 8.82 million square meters, a record high in the company's history. Equipment investment and renovation plans in Liancheng and Feixi were implemented. Starting in March '24, the company's additional production capacity was gradually released. In '23, the company's VIP board achieved revenue of 822 million yuan, +32.23% year-on-year, gross profit margin of 33.30%, and +6.09pct year-on-year. The 23Q4 company accrued asset impairment losses and credit impairment losses totaling $8.79 million; due to the calculation of financial expenses on convertible bonds, 23Q4 and 24Q1 interest expenses were 6.78 million yuan and 8.19 million yuan respectively, 22Q4 and 23Q1 were 180,000 yuan and 150,000 yuan respectively; at the same time, the company's 24Q1 sales expenses and management expenses all increased year-on-month. Excluding factors such as cost calculation, the company's actual performance growth was even more impressive. With the drafting of a new national standard for the energy efficiency of household refrigerators, the domestic market for VIP boards is expected to further open up.

Profit forecasting and investment advice. The company's earnings per share are expected to be 1.71 yuan, 2.66 yuan, and 3.49 yuan respectively in 24-26. The current stock price corresponds to PE 19 times, 12 times, and 9 times. Considering the company's business structure and performance growth rate, refer to comparable company valuations, maintain the judgment that the company's reasonable value is 36.62 yuan/share, corresponding to 24-year performance 21 times PE, and maintain a “buy” rating.

Risk warning. Downstream demand for vacuum insulation panels fell short of expectations; exchange rates fluctuated greatly; raw materials fluctuated greatly; vacuum glass promotion fell short of expectations; major safety and environmental incidents.