On the evening of February 28, 2024, Xinbao Co., Ltd. announced the 2023 annual results report.
The company released its 2023 performance report. The company achieved annual revenue of 14.6 billion yuan, an increase of 6.9% over the previous year, achieved net profit of 980 million yuan, an increase of 1.6% over the previous year, and realized net profit without return to mother of 1.0 billion yuan, an increase of 0.5% over the previous year. The performance was in line with market expectations.
Looking at Q4 alone, we estimate that the company achieved revenue of 3.89 billion yuan in a single quarter, an increase of 30.7% over the previous year, and achieved net profit of 240 million yuan to mother, an increase of 105% over the previous year.
Let's look at it by business. 1) On the export side, the company achieved revenue of 10.81 billion yuan for the whole year, an increase of 11.1% year on year. We estimate that revenue for the fourth quarter was 2.66 billion yuan, an increase of 51.6% year on year. The year-on-year growth rate of export sales revenue in the fourth quarter further increased compared to Q3. As overseas channels entered the inventory replenishment cycle in the third quarter, the company's export orders and revenue performance improved rapidly. Considering that demand in the North American market is relatively stable, channel inventory levels have returned to normal, and the first half of the year is still in a low base cycle, we believe that the export side will continue to drive the company's revenue growth in the next two quarters; 2) On the domestic sales side, the company achieved revenue of 3.84 billion yuan, down 3.2% year on year. We estimate that revenue for the fourth quarter achieved revenue of 1.23 billion yuan, a year-on-year increase of 0.5%. For the first time since 23Q2, the year-on-year revenue growth rate in the single quarter was corrected. Overall demand in the electricity market remains lackluster, and the improvement in the company's domestic sales revenue performance shows operational resilience.
On the profit side, the company's net interest rate to mother fell slightly by 0.3 pct to 6.7% year on year in 2023. Among them, the net profit margin for single Q4 reached 6.2%, a significant improvement of 2.2 pct year on year. However, considering that the total year-on-year negative impact of exchange earnings and hedging on the company's operating profit was 160 million yuan, we estimate that after considering the impact of tax shields, the total negative impact on the company's net interest rate was 0.9 pct. Excluding the effects of exchange rate fluctuations, the company's actual net interest rate rose slightly by about 0.6 pct year on year. This is particularly rare in the context of a sharp increase in the share of export business with relatively low profitability over the same period last year, showing the positive results brought about by the company's many cost reduction and efficiency measures in the early stages.
Profit forecasting and investment ratings. We expect the company's revenue for 2024-2025 to be 16.1 billion yuan and 17.8 billion yuan, up 10% and 10%, respectively. The net profit due to mother is estimated to be 1.13 billion yuan and 1.29 billion yuan, respectively, up 15% and 15% year over year, respectively. The corresponding PE is 10.0 times and 8.7 times, respectively, maintaining the “Highly Recommended” investment rating.
Risk warning: Market demand falls short of expectations, and industry competition is intensifying.