Core views:
23 years of high performance growth, and we look forward to the accelerated release of orders. The company released 23 annual reports and 24 quarterly reports. In 2023, it achieved revenue of 1,505 billion yuan (+22.68% year over year) and net profit to mother of 173 million yuan (+40.76% year over year), and achieved high performance growth through localization of semiconductors and orders from new overseas customers/fields. In Q1 2024, we achieved operating income of 273 million yuan (+2.08% year over year) and net profit to mother of 35 million yuan (+5.44% year over year). Stable performance was influenced by off-season, construction, and delivery factors. Combined with the company's abundant on-hand orders, growth characteristics remained outstanding throughout the year.
High-margin consumables have raised the level of profit margins, and overseas orders have maintained high growth. The company sold 4.552,500 units/piece of fan filter units and filter products in 2023, of which the share of consumables revenue increased to 30%. High gross margin consumables drove the company's net sales margin of +1.38 PCT year-on-year in 23. Furthermore, overseas orders accelerated, and the company's overseas revenue in '23 was 171 million yuan (+30.79% year over year). In terms of segments, cleanroom air purification, indoor air quality optimization, and air pollution emission control accounted for 75%, 22%, and 3% of revenue, respectively.
The advantages of clean semiconductors are built, and domestic substitution and overseas expansion drive growth together. The company is already leading domestic manufacturers and benchmarking against overseas leaders in terms of product strength and brand reputation, forming an oligopoly competition in the domestic market with CAMFIL and AAF international giants. In the future, the expansion of production capacity in the domestic market combined with domestic substitution dividends will bring about a broad increase in orders. At the same time, the company has accelerated its overseas expansion, obtained certification from many overseas semiconductor manufacturers and international standards such as ISO and ASHRAE, and continues to send product samples, so the company's overseas business can be expected to grow.
Profit forecasting and investment advice. Semiconductor cleaning leader, increasing share of consumables + opening up room for growth in overseas markets. The company's net profit for 2024-2026 is estimated to be 228/2.94 billion yuan, corresponding to PE 19.82/15.35/12.38 times. The 2024 25xPE valuation is given, with a reasonable value of 42.38 yuan/share, maintaining a “buy” rating.
Risk warning. Project commissioning progress falls short of expectations; changes in industry policies; risk of obtaining new orders.