The company released its 2023 annual report and 2024 quarterly report
In 2023, revenue was 1.118 billion yuan, +18.71% year over year; net profit to mother was 98 million yuan, +26.04% year over year; deducted from non-return mother 81 million yuan, +54.21% year over year. Q4 2023 revenue was 311 million yuan, +12.70% YoY, +0.49% month-on-month; net profit to mother was 29.9 million yuan, +52.23% YoY, +89.24% month-on-month; deducted 25.95 million yuan, +20.63% YoY and +72.20% month-on-month.
Q1 revenue in 2024 was 287 million yuan, +14.26% year over month, -7.54% month on month; net profit to mother was 24.56 million yuan, +13.49% year over year, -17.86% month on month; after deduction of 21.27 million yuan without return to mother, +13.73% year over month, -18.03% month on month.
Profitability increased, and the gross profit of high-strength high-conductivity copper alloys and medical components increased significantly in 2023 by the company's total gross profit of 248 million yuan, +31.9% over the same period last year. Among them, the main business gross profit of high-strength high-conductivity copper alloys, medium- and high-voltage electrical contact materials, high-performance metal chromium powder, and medical imaging components was 9790, 6647, 1143, and 11.23 million yuan, with year-on-year changes of +40.2%, +0.6%, and +42.2%, accounting for 39.5%, 26.9%, 4.6%, and 4.5% in that order. The company's gross profit margin in 2023 was 22.18%, +2.55pct year-on-year, mainly due to the rapid growth of the company's international market business and continuous optimization of the domestic product sales structure.
Downstream demand for copper alloys has increased, and rocket nozzles have entered the mass production stage
In 2023, high-strength and high-conductivity copper alloy revenue was 534 million yuan, +20.83% year over year, gross profit margin 18.33%, and +2.54 pct year on year. Strong demand in the downstream NEV market boosts demand for connectors, the global rail transit market is developing steadily, and the company's rail transit high-power traction motor end ring and guide bar business is growing steadily. The global commercial space industry has exploded, and the company's liquid rocket engine thrust interior wall products have entered the mass production stage.
In 2024, the company will quickly promote investment and construction of the “Liquid Rocket Engine Thrust Chamber Materials, Parts and Components Industrialization Project”. The project is expected to produce about 300 tons of forgings per year, 400 sets of rocket engine injector panels, 1,100 sets of rocket engine thrust interior walls, exterior walls, etc., with a total construction period of about 5 years.
CT&DR ball tube market share is steadily increasing, and new production capacity construction is being promoted
In 2023, the revenue of medical imaging components was 48,3294 million yuan, +21.16% year over year, gross profit margin 23.24%, and +3.85pct year on year. With the rapid development of domestic downstream medical imaging equipment enterprises, the company's share in the domestic market has steadily increased. Thanks to the gradual batch supply of some products, unit costs have gradually been reduced.
In 2023, the company launched the “Sirui New Material Technology Industrial Park Construction Project (1)” to build a “R&D and industrialization project for electric vacuum materials and components such as medical imaging equipment with an annual output of 30,000 sets”.
In 2024, the company will start construction of the plant and strive to complete it within this year. The project is expected to produce 30,000 sets of CT tube components, 15,000 sets of DR ray tube components, 500 linear accelerator components, 3,500 semiconductor product components, and 30,000 sets of VI conductive system components for high voltages. The construction period is 4 years.
Revenue of high-performance chromium powder and medium- and high-voltage electrical contact materials increased steadily
In 2023, the revenue of high-performance chromium powder was 59.119 million yuan, +25.34% year over year, gross profit margin 19.08%, -1.42pct year on year. Medium and high voltage electrical contact materials revenue was 281 million yuan, +7.52% year over year, gross profit margin 23.68%, -1.62 pct year on year. In 2023, the company completed the construction of an R&D and manufacturing base with an annual output of 2000 tons of high-performance metallic chromium.
Optical module materials have emission potential
In 2023, the company launched the “Sirui New Material Technology Industrial Park Construction Project (1)”. Among them, the “Project with an annual output of 20 million sets of optical module chip bases/case materials and components” will achieve an annual output of 20 million sets of optical module chip bases and 10 million sets of optical module chip cases. Among them, optical module chip bases have been supplied in batches to the market, and the optical module chip case is in the sample verification stage, and the construction period is 5 years. The company's major downstream customers include Tianfu Communications, Global Radio and Television, Dongguan Xuntao, Finisar, etc.
Investment advice:
We expect the company to achieve operating income of 16.90, 21.61, and 2,810 billion yuan respectively in 2024-2026, achieving net profit of 1.40, 1.88, and 262 million yuan, corresponding EPS of 0.25, 0.34, and 0.47 yuan/share, respectively. Currently, the corresponding PE price is 45.4, 33.9, and 24.3 times. The company maintained a “buy-A” rating, and the target price for 6 months remained at 17.31 yuan/share, corresponding to about 69.2 times PE in 24 years.
Risk warning: New product promotion falls short of expectations, demand falls short of expectations, and project progress falls short of expectations.