Incident: The company released its 2023 annual report. In 2023, it achieved operating income of 213.958 billion yuan, an increase of 22.15% year on year; realized net profit attributable to mother of 9.014 billion yuan, an increase of 83.77% year on year; realized net profit deducted from non-mother of 8.0 billion yuan, an increase of 146.13% year on year.
The intelligent logistics business led to an increase in the company's gross margin, and the overall cost ratio was stable: the overseas subsidiary Kaiao Smart Logistics business had revenue of 87.456 billion yuan in 2023, up 10.83% year on year, accounting for 40.88%. The gross margin of this business in 2023 was 24.33%, up 5.37 pcts year on year. Benefiting from this, the company's overall gross margin reached 21.09%, up 3.30 pcts year on year. In terms of cost ratio, the company's sales expense ratio, management expense ratio, R&D expense ratio, and financial expense ratio in 2023 were 6.3%, 4.4%, 3.8%, and 0.3%, respectively, +0.18pct, -0.20pct, -0.65pct, and +0.78pct, respectively. Among them, the increase in financial expenses was due to interest expenses.
The advantages of heavy truck engines were further expanded, and smart logistics accelerated profit recovery: all business segments of the company showed strong growth momentum in 2023. The company's total engine sales in 2023 were 736,000 units, up 28.5% year on year, including heavy truck engine sales volume of 306,000 units, up 96.0% year on year; natural gas heavy truck engine market share reached 65%, up 6.0 pct year on year; 6x4 tractor engine market share of 500 horsepower or above reached 35.9%, up 21.1 pct year on year. In terms of vehicles, the company's total sales volume of heavy trucks in 2023 was 116,000 units, up 45.3% year on year; of these, 26,000 heavy gas trucks were sold, up 416.4% year on year; heavy truck export sales were 52,000 units, up 51.0% year on year. The smart logistics sector achieved operating revenue of 11.43 billion euros, an increase of 2.7% over the previous year, the highest level in history. Net profit reached 310 million yuan, an increase of 197.2% over the previous year. Looking ahead to 2024, the company will continue to vigorously develop products such as hydraulic powertrains, new energy product development and mass production, marine equipment manufacturing, artificial intelligence, etc., to further achieve global leadership in core technology and industrialization.
Investment advice: We expect the company to achieve net profit of 113.78/133.78/15.247 billion yuan in 2024-2026, corresponding PE of 13.64 /11.60/10.18 times, respectively, to maintain the “increase in holdings” rating.
Risk warning: risk of fluctuations in raw material prices; risk of increased industry competition; risk of macroeconomic downturn.