23 年海洋业务景气有所承压，光通信毛利率大幅改善：23 年收入拆分来看，光通信业务实现营收73.7 亿元，同比下滑2.5%，毛利率29.4%，同比+9.3pct；智能电网实现营收193.4 亿元，同比增长10%，毛利率13.6%，同比+0.4pct；海洋能源与通信实现营收33.8亿元，同比下滑24.6%，毛利率32.8%，同比-3.3pct；工业与新能源智能实现营收57.3亿元，同比增长14.4%，毛利率15.1%，同比+1.1pct；铜导体实现营收99.4 亿元，同比增长22.9%，毛利率2.3%，同比+1.1pct。分地区来看，境内收入同比持平，增长主要来自境外。24Q1 营收环比下滑5.9%，但归母净利润/扣非净利润环比增长47%/22%。Description of the event
In 2023, the company achieved revenue of 47.62 billion yuan, up 2.5% year on year; net profit to mother was 2.15 billion yuan, up 36% year on year; net profit after deducting non-net profit was 2.03 billion yuan, up 32% year on year. 24Q1 achieved revenue of 11.78 billion yuan, up 8.4% year on year; net profit to mother was 513 million yuan, up 29.9% year on year, after deducting non-net profit of 411 million yuan, up 13.9% year on year.
Incident comments
The marine business boom was under pressure in '23, and the gross margin of optical communications improved dramatically: in terms of revenue split in '23, the optical communications business achieved revenue of 7.37 billion yuan, down 2.5% year on year, gross profit margin of 29.4%, +9.3 pct year on year; smart grids achieved revenue of 19.34 billion yuan, up 10% year on year, gross profit margin of 13.6% year on year, up to +0.4 pct year on year; industrial and new energy intelligence achieved revenue of 5.73 billion yuan Yuan, up 14.4% year on year, gross profit margin was 15.1%, +1.1 pct year on year; copper conductors achieved revenue of 9.94 billion yuan, up 22.9% year on year, gross profit margin 2.3% year on year, and +1.1 pct year on year. By region, domestic revenue remained flat year on year, and the increase mainly came from overseas. 24Q1 revenue fell 5.9% month-on-month, but net profit/net profit deducted to mother increased 47%/22% month-on-month.
Gross margin increased in '23 and expense ratio improved in '24: the company's gross margin in '23 was 15.3%, up 1.1 pct year on year, net margin was 4.7%, up 1.3 pct year on year. 24Q1's gross margin was 15%, down 0.8 pct year on year, up 4.6 pct month on month; net profit margin was 4.6%, up 1 pct year on year, up 1.1 pct month on month; in terms of period expenses, 24Q1 sales/management/R&D/finance expense ratios were 2.6%/4.0%/1.4%, respectively, -0.2pct/-0.2pct.
24Q1 domestic submarine cable bid acceleration: In April, the company won the bid for the 220kV submarine photoelectric composite cable project in Danzhou, Hainan, Datang, with a bid price of 477 million yuan. In mid-March 2024, the company announced that it had won bids for submarine cable and offshore projects in Hainan and Shandong with an amount of 1,186 billion yuan. In March, the company announced that the total amount of capital introduced into the marine energy sector would not exceed RMB 3 billion. In addition to the traditional Jiangsu and Guangdong Haifeng provinces, the company has the ability or experience to acquire projects in Guangxi, Hainan, Shandong, etc., where the company has recently accelerated the deployment of sea breezes. At the same time, the company has extensive overseas business and channel accumulation, and overseas project orders and projects are expected to accelerate in 24 years. Furthermore, on April 24, the Hainan Provincial Development and Reform Commission began revising the “Hainan Offshore Wind Farm Project Plan”, which is expected to increase the number of offshore wind power sites in Hainan Province from 11 to 18, with a scale of 24.9 GW.
Quantum communication is experiencing accelerated development, and the company's active layout is expected to benefit: operators will use quantum communication as one of the key development areas in 24, and the company's layout of quantum secure communication is expected to fully benefit from industry trends. In 2016, the company and researchers from the Chinese University of Science and Technology jointly invested in the establishment of Jiangsu Hengtong Wentian Quantum Information Research Institute Co., Ltd., with Hengtong Optoelectronics holding 70% of the shares. At the 2023 MWC conference, the company and its partner China Unicom launched the “5G+ quantum” series of innovations incorporating quantum encryption technology. In addition, China Telecom has made quantum secure communication security one of its key business expansion directions for 24 years.
Profit forecast and investment advice: The marine business boom was under pressure in '23, and gross margin declined, but the gross margin of optical communications improved dramatically. The 24Q1 fee rate improved significantly. The company's bid for domestic submarine cables accelerated, continued to win bids for projects in Hainan and Shandong, and industry-level ocean wind planning was improving. Quantum communication welcomes accelerated development, and the company's active layout is expected to benefit. Net profit due to mother for 2024-2026 is estimated to be 2,423 billion yuan, 2,714 billion yuan, and 2,977 billion yuan, corresponding to year-on-year growth rates of 13%, 12%, and 10%; corresponding PE is 14 times, 13 times, and 12 times. The main recommendation is to maintain the “buy” rating.
Risk warning
1. Industrial policy and market risk;
2. Overseas investment and business risks.
