Investment events
(1) In 2023, the company achieved operating income of 1,268 billion yuan, a year-on-year increase of 5.25%; net profit to mother was 121 million yuan, a year-on-year decrease of 60.68%; net profit after deducting non-return to mother was 279 million yuan, a year-on-year decrease of 3.20%; and plans to distribute 3 yuan (tax included) for every 10 shares to all shareholders.
(2) In the first quarter of 2024, the company achieved operating income of 316 million yuan, a year-on-year increase of 4.56%, and net profit to mother of 72.83 million yuan, a year-on-year decrease of 4.00%.
Key points of investment
Revenue from external rotor fans was high in 2023, and gross margin was basically stable. In 2023, the company achieved operating income of 1,268 billion yuan, an increase of 5.25% over the previous year. By product, revenue from external rotor fans was 594 million yuan, up 10.78% year on year; revenue from freezer motors was 315 million yuan, down 5.78% year on year; revenue from ECM motors was 228 million yuan, down 4.98% year on year. In terms of profitability, the company's overall gross margin in 2023 was 33.69%, which was basically stable year on year; of these, 2023Q4 company's gross margin was 33.97%, down 2.00 percentage points year on year and 0.70 percentage points month on month.
Accelerate innovation-driven development and actively enhance new quality productivity
The company actively implements innovation-driven development strategies, focusing on developing new quality productivity. The company's product line has been expanded to include high-overload servo motors, high-power permanent magnet synchronous motors, low-voltage DC servo motors, EC180 fans, and high-protection EC fans, all of which have been mass-produced. As of the end of 2023, the company held 256 valid patents, including 30 invention patents, 165 utility model patents, 61 design patents, and 38 software copyrights. As the company's R&D investment increases, it continues to expand product application areas and space, and increase new momentum for development.
Seizing policy dividends, leading the market for cold chain equipment components, the company continues to consolidate its leading position in the cold chain industry and actively expand the application of its products in many emerging fields, including heat pumps, energy storage, data centers, photovoltaics, lithium batteries, industrial automation and robotics. Thanks to a series of support policies introduced by the central and local governments, the cold chain industry is developing rapidly. As a manufacturer of key components of cold chain equipment, the company's main products, freezer motors, external rotor fans, and ECM motors, will gain more market opportunities and further promote the company's development.
Profit forecasting and valuation
The profit forecast was lowered and the “buy” rating was maintained. Considering the intensification of competition in the industry and the slow recovery in demand, we carefully lowered the company's net profit due to mother in 2024-2025 to 365 million yuan and 417 million yuan (444 million yuan and 509 million yuan respectively before the reduction), and added the 2026 forecast to 475 million yuan, corresponding EPS was 1.59, 1.82, and 2.07 yuan, respectively, and the corresponding PE was 14, 12, and 11 times. Maintain a “buy” rating.
Risk warning
Risk of policy changes, risk of market competition, risk of declining gross margin.