The company announced that it would achieve revenue in 2023, return to net profit, and deduct non-net profit of 124.60, 15.59, and 1,421 billion yuan, an increase of 18.2%, 27.8%, and 21.6% over the previous year. 2024Q1 revenue, including net profit and net profit of 26.58, 3.63, and 341 million yuan, increased 22.4%, 66.3%, and 87.0% year-on-year. The company's product structure and management system can support the company's growth into a large enterprise. The short to medium term business trend may accelerate and maintain a highly recommended rating.
The performance is growing rapidly, and the quality of the reports is good. The company's revenue in 2023 increased 18.2% year-on-year, and gross margin increased by 3.2 pcts to 29.5%. Among them, the gross margin of switch products increased sharply by 6.7 pcts. The cost rate increased by 2.1 pcts to 14.9% during the period (the R&D cost rate increased by about 1 pcts, and the increase in management expenses was mainly affected by option costs). Due to prudential principles, the net interest rate for the whole year increased by 0.9 pcts after accounting for the above factors by a total of 130 million yuan. The company's cash repayment is still excellent. Net cash at the end of the period was nearly 5 billion yuan, interest-bearing debt was very small, ROE increased by 3 pcts by 16%, and the report was healthy.
Order growth is accelerating, and there is plenty of room for overseas business. The company added 16.513 billion new orders in 2023, a sharp increase of 36.22% over the previous year. The domestic and foreign growth rate is comparable. In '23, the company added 4.01 billion yuan in overseas orders, and the overseas market generated revenue of 2.15 billion yuan. The company has invested in overseas business for more than ten years, formed corresponding product systems and solutions, and gradually built a more complete sales system. The products and services are competitive. On the basis of the many existing product categories, the company's solution advantages will gradually become apparent, and there is plenty of potential and room for future use.
Continuing to promote product addition, the business structure and management system can support the company's growth. Over the past ten years, the company has continuously added products through endogenous cultivation and epitaxial integration, developing from an early single business to a three-dimensional product system covering switches, GIS, coil equipment, protection automation, and power electronics, and began strategically cultivating overseas business very early. The company has gone through the industry cycle in this process. In the past 5 years, the company entered a new round of business expansion, began cultivating new business categories such as transformers, automotive electronics, energy storage, etc., and enriched product lines such as flexible and medium/low voltage. In terms of management systems, after the sales and procurement platform system, the company began to strengthen capacity building in China and Taiwan, and also paid more attention to incentives at the middle level. Overall, the current business structure and management system can support the company's further growth.
Investment advice: The company's existing products are competitive, the future development direction is clear, the management ability is strong and strategic strength. It is a long-distance runner; the company's current business structure and management system can support the company's growth. However, in the short to medium term, the company's business trend may be accelerating. Adjust profit forecasts to maintain a “Highly Recommended” rating.
Risk warning: grid investment fluctuations, new business risks, overseas business risks.