Sinotruk released its 2023 annual performance report. In 2023, the company achieved revenue of 42.07 billion yuan, +46% year over year; of these, 23Q4 revenue was 11.31 billion yuan, +77.6% year over year, and +6.9% month on month. In 2023, the company obtained net profit without deduction of 1.04 billion yuan, +464.2% year-on-year; of these, 23Q4 deducted 400 million yuan, +370.9% year-on-year, and +176.7% month-on-month.
2023Q4 profitability has been significantly restored. According to the company's 2023 annual report, 23Q4's gross profit margin was 9.4%, +5.9pct year on month; net profit margin was 4.7%, +6.1pct year on year, +2.6pct month on month; ROE was 2.9%, +4.0pct year on year, +1.8pct month on month. Both year-on-year and month-on-month repairs were significant.
Sales increased substantially by 33% to 96,000 units in 2023. According to the company's annual report, demand for heavy logistics trucks rebounded in 2023. In particular, demand for heavy gas trucks was strong. Combined with strong export momentum, sales in the heavy truck industry grew significantly year-on-year. The company accelerated product optimization, upgrading and structural adjustment, continuously improved product quality and product competitiveness, accurately implemented marketing strategies, and achieved good growth in production and sales.
Sinotruk has a clear lead. According to the company's 2023 annual report, the company closely focuses on market demand, product structure adjustments are gradually being put in place, new heavy products are gradually becoming sales support, and it has steadily ranked first in the industry in market share in various market segments. For example, in terms of tractors, the 13NG industry had the highest growth rate and the dangerous goods industry; in terms of trucks, customer recognition in market segments such as express delivery and Lutong continues to increase; in terms of mixers and dump trucks, the market share in the muck truck market share is the highest; in terms of special vehicles, the market share in fields such as fire engines, pump trucks, television broadcasts, and oilfield operations continues to lead the industry.
We believe that as a leader in the heavy truck industry, with the collaboration of Shandong Heavy Industries Group, Sinotruk is expected to benefit from the new heavy truck boom cycle driven by domestic heavy gas.
We expect the company's 2024/25/26 revenue to reach 488/559/61 billion yuan, net profit to mother of 14.4/18.9/2.22 billion yuan, corresponding EPS of 1.22/1.60/1.89 yuan. The stock price at the close of March 26, 2024 corresponds to PE of about 13/10/9 times, and PB of about 1.2/1.1/1.0 times. Considering the company's leading edge, the company was given a reasonable PE range of 16-18 times in 2024, a corresponding reasonable value range of 19.59-22.03 yuan, and 1.4-1.6 times the corresponding PB for 24 years. Maintain an “better than market” rating.
Risk warning: Economic growth falls short of expectations, and raw material prices have risen sharply.