incident. The company released its 2023 annual report and 2024 quarterly report on April 24. In 2023, the company achieved operating income of 4.840 billion yuan, +0.59% year-on-year; net profit to mother was 390 million yuan, +17.80% year-on-year. In the first quarter of 2024, the company's revenue was 743 million yuan, -15.88% YoY; net profit to mother was -021 million yuan, -140.85% YoY.
2023 operating conditions. The company's performance was steady in 2023. Revenue from various products was basically the same as the previous year. Total revenue of automation equipment was 4.150 billion yuan, +1.31% year on year, gross margin was 33.27%; revenue from jigs and spare parts was 574 million yuan, -5.65% year on year, gross margin 40.69%; core components revenue was 113 million yuan, +6.68% year on year, gross margin was 16.73%. Among them, automation equipment is the company's main source of business revenue, and its gross margin level increased by 2.68 pct year-on-year, mainly because the company continues to maintain an advantageous position in the automation equipment industry, while procurement costs have declined due to the improvement of the supply chain system. In 2023, the company's overall gross sales margin and net margin were 33.79% and 7.94%, respectively, with year-on-year changes of +1.53pct and 1.12pct.
Expenses remained stable during the company period, and in-depth product research and development continued. According to the 2023 annual report, the company's sales, management and financial expenses were 353 million yuan, 277 million yuan, and 20 million yuan respectively. Sales and management expenses changed +6.48% and +7.51% year-on-year. The increase in sales expenses is mainly due to the increase in sales personnel expenses due to the company's increased development efforts, while the change in management expenses is due to the increase in employee remuneration. Sales, management, and finance expense ratios were 7.29%, 5.73%, and 0.41%, respectively, with year-on-year changes of +0.40pct, 0.37pct, and 0.44pct. In terms of R&D, the company invested 497 million yuan in R&D in 2023, +0.73% year-on-year, accounting for 10.27% of total revenue, an increase of 0.01 percentage points. In 2023, the company received a total of 138 new invention patents and 128 utility model patents. It keeps up with international frontiers and has always used technological innovation as the driving force for the company's survival and sustainable development.
Consolidate 3C business advantages and achieve breakthroughs in flexible automated production lines. Consumer electronics is the company's core business area. According to the 2023 annual report, the company's 3C business achieved a total revenue of 3,697 billion yuan, +4.20% year-on-year, accounting for 76.39% of the company's total revenue. The company has always maintained strong independent innovation capabilities and rapid technological update capabilities in this field. In 2023, the company will adhere to the strategic direction of “horizontal expansion and vertical expansion”, gradually broadening the scope of application of automation equipment in terminals, while developing vertically in the industrial chain, extending from terminal manufacturing to component assembly. Through deep understanding of consumer electronics product processes and continuous research and development, the company successfully disruptively launched a flexible modular production line covering the entire FATP segment. Its automation, high flexibility, and high versatility are conducive to rapid wiring and the formation of production capacity in a short period of time. At present, the product has been mass-produced, and more than 40 pieces have been delivered to the production line.
Actively expand the field of new technology and enrich the company's product range. In addition to basic business, the company actively develops fields such as core components, smart warehousing and logistics, and low-altitude economy. In terms of core components, the company's robot product line introduced a forward-looking algorithm for industrial robots, which solved the problem of high-speed and high-precision control of complex motion trajectories; smart warehousing and logistics performance grew steadily, and leading companies in the tire industry achieved good results. The WMS system was upgraded to version 6.0. The system is based on the design of multiple factories and warehouses to support the control needs of multiple factories and warehouses; in the field of low-altitude economy, it is mainly committed to providing users with comprehensive low-altitude inspection solutions deployed on a grid and scale for smart city governance, providing users with fully automated drones in various business scenarios Comprehensive services such as inspection, AI recognition of inspection results, automatic equipment maintenance and management, meteorological monitoring and video surveillance, 3D GIS geographic information, and integrated communication.
Investment advice. The company implements a “1+N” business pattern, and is deeply involved in the field of consumer electronics, while actively promoting the new technology business field. In the context of the rapid development of China's scientific and technological level, there is an urgent need for localization in the field of high-end equipment. Technical strength has become a key factor in future competition. The company continues to invest in technology research and development to help its performance develop steadily, and for the first time, it has been covered with an “increase in weight” rating. We expect net profit to be 4.75, 602, and 716 million yuan respectively in 2024-2026, EPS 1.06, 1.35, 1.60 yuan, and PE 19.6, 15.4, and 13.0 times.
Risk warning: risk of technology development and technology iteration; risk of dependence on the Apple industry chain; risk of concentrated downstream application industries; risk of market development; risk of gross margin fluctuations; risk of inventory impairment.