Event: The company announces the 2023 Annual Report and the 2024 First Quarter Report. In 2023, revenue, net profit attributable to mother, and net profit without return to mother were 3.41 billion yuan, 0.96, and 80 million yuan, respectively, up 23.77%, 18.71%, and 4.00% year-on-year; in the first quarter of 2024, revenue, net profit to mother, and net profit without return to mother were 0.75, 0.19, and 0.17 billion yuan, respectively, up 17.98%, 30.70%, and 21.79% year-on-year.
The company's performance is growing steadily, and there is plenty of cash on hand to actively integrate upstream and downstream resources in the industrial chain. Looking at a single quarter, 2023Q4 revenue and net profit to mother were 1.18/036 million yuan (YoY +58.77%/+51.18%), respectively, and the 24Q1 revenue growth rate remained steady at 18%. By product, in 2023, the company's high-reliability sensor/sensor network systems achieved revenue of 2.74 billion yuan (YoY +14.81%/+92.87%), respectively, and the 2023 gross margin of the corresponding segment business was 60.03%/39.98%, respectively. Among them, sensor network system revenue increased significantly, mainly due to the growth of non-real-time sensor network system platforms and rotating equipment condition monitoring and fault analysis systems business. On the cost side, the company's cost ratio increased by 0.81 pct to 26.59% year on year, and the company's sales/management/finance/R&D expenses ratio was 4.08%/10.36%/-2.44%/14.58% (YoY+0.57/+1.26/ -2.54/ +1.51pct), respectively. Among them, the company increased R&D investment in 2023 by 38.03% year-on-year, which increased R&D investment, recruitment of new R&D personnel, and increased R&D projects. On the asset side, the company has plenty of cash on hand. According to the company's annual report for '23, by the end of '23, the company had a total monetary capital of 635 million yuan to actively integrate industry chain resources. It had participated in the establishment of Nanjing Kaios Data Technology Co., Ltd. and Suzhou Zixin Microelectronics Co., Ltd. with its own capital, and invested in related investment partnerships to achieve the return of the company's industrial chain integration.
Profit forecast and investment advice: EPS is expected to be 0.98, 1.27, and 1.59 yuan/share in 2024-26, respectively. We maintained a reasonable value of 48.21 yuan/share, corresponding to a 24-year PE of 49 times, and maintained an “excess” rating.
Risk warning: Risk of loss or shortage of R&D personnel, high customer concentration, policy adjustments