Incident: The company announced that in 2023, it would achieve revenue of 2,694 billion yuan, a decrease of 14.30%; net profit of 78 million yuan, a decrease of 69.36%; deducted non-attributable net profit of 54 million yuan, a decrease of 76.34%; and proposed a cash dividend of 41.13 million yuan, with a cash dividend ratio of 52.5%. 2024Q1 achieved revenue of 497 million yuan, a year-on-year decrease of 14.42%; net profit of 51 million yuan, a decrease of 46.46%; and net profit after deducting non-vested net profit of 47 million yuan, a decrease of 48.83%.
Net profit margins were under pressure in 2023, and net profit margins were under pressure due to increased impairment loss rates. The company achieved a gross profit margin of 19.36% and a decrease of 7.3pct in 2023; the cost ratio for the period was 10.20% and 0.62pct. Among them, the company's sales/management and R&D/finance expense ratios were 2.18%/7.93%/0.08%, and the year-on-year change was -0.28pct/-0.34pct/0pct; the asset and credit impairment loss rate increased by 6.79%, and the increase in impairment loss rate was due to corporate debt restructuring, housing impairment depreciation and preparation for deduction of bills receivable and accounts receivable. 7.96pct The company's net operating cash flow in 2023 was 98 million yuan, less than the previous year's outflow of 121 million yuan; the revenue ratio increased 16.61 pcts from 86.43%; and the cash on payment ratio increased 18.1 pct from 98.20%.
2024Q1 Some accounts receivable are reversed from bad debts. The company achieved a gross profit margin of 17.37% and a decrease of 11 in 2024Q1.
57pct; the cost ratio for the period increased by 0.64pct to 10.56%. Among them, the company's sales/management and R&D/finance expense ratios were 3.60%/7.16%/-0.21%, respectively, with a year-on-year change of 1.57pct/-0.93pct/0pct. The sharp decline in the management expense ratio was due to unaccrued share payments in the current period; the asset and credit impairment loss rate decreased by -5.54%.
7pct, mainly due to the return of some accounts receivable due; the net interest rate was 10.35%, down 6.19pct. The company's 2024Q1 operating cash flow had a net outflow of 77 million yuan, an increase of 188 million yuan over the previous year; a 51.1 pct increase of 137.41%; and an increase of 14.71 pct from current payment ratio of 182.41%. As of 2024Q1, the company's accounts receivable and notes, inventory+contract assets, accounts payable and notes, accounts receivable plus contract liabilities were $17.4/4.9/9.7/310 million, respectively, a year-on-year change of -5.11%/18.33%/-21.02%/26.07% from the beginning of 2024.
Investment advice: The company's EPCOS business system is perfect and customer acquisition capacity is strong. As the company's storage and charging business continues to expand and the energy storage business continues to increase, the company's future business is expected to continue to expand outside the province and overseas. We expect the company to achieve net profit of 168/2.05/256 million yuan in 2024-2026, corresponding PE of 27.2/22.5/17.9 times, respectively, and maintain the “increase in holdings” rating.
Risk warning: Steady growth falls short of expectations; risk of macroeconomic fluctuations; risk of weak downstream demand.