Event: The company released its 2022 annual report and 2023 quarterly report. In 2022, the company achieved revenue of 2.90 billion yuan, a decrease of 0.7% over the previous year; achieved net profit of 260 million yuan, an increase of 6.0% over the previous year; net profit of the non-return mother was 3.4 billion yuan, an increase of 46.0% over the previous year. 2023Q1 achieved revenue of 7.0 billion yuan, a decrease of 2.3% over the previous year, and achieved net profit of 0.7 billion yuan to the mother, an increase of 3.4% over the previous year.
The sales structure was optimized in 2022, and the gradual release of new products led to an improvement in gross margin, achieving a 46.0% year-on-year increase in net profit after deducting non-net profit. In 2022, due to the complex and changing effects of the world trade situation, the company's revenue growth rate came under pressure, achieving revenue of 2.90 billion yuan, which is basically the same as the previous year. The company continuously optimizes mature products, while accelerating the marketing of new component-based products and gradually achieving mass production, leading to sales structure optimization: in 2022, industrial control motors achieved sales revenue of 350 million yuan, an increase of 17.3% over the previous year; demand for electronic water pumps and aluminum die-castings for new energy vehicles grew rapidly, causing auto parts revenue to increase 38% year-on-year to 330 million yuan; cooling pumps for photovoltaic energy storage in the new energy sector achieved revenue of 42.17 million yuan, an increase of 467.8% over the previous year, pioneering another growth point for the company in the new energy sector; motors and sets for medical devices in the medical sector The number of items continued to rise high, and its sales revenue increased 83.7% year over year. Thanks to the optimization of the sales structure, the company's gross margin increased to 28.5% in 2022, an increase of 2.9pct over the same period last year. Net profit after deducting non-return income increased by 46.0% year-on-year when revenue was basically flat.
Continuing the trend of improving gross margin, 2023Q1 is gradually taking shape in various fields, and is expected to continue to increase its share in the high-end sector. The pressure on the revenue side of 2023Q1 continues, but profitability continues to improve. The company's gross margin increased to 32.9% in 2023Q1, an increase of 5.1 pct over the same period in 2022. The company is a leading micromotor modular solution provider in China. It has an internationally competitive R&D base and advanced automated production lines. The company closely focuses on the “multi-application field” strategy. At present, it has formed a comprehensive business capability dominated by a wide variety of motor products with related precision structures, drive control design and manufacturing solutions. The products cover many downstream key fields such as home appliances, automobiles, and medicine. In the future, it is expected to rapidly increase its share in high-end medical equipment, energy storage electronic pumps, etc.
Profit forecasts and investment recommendations. We expect the company's revenue for 2023-2025 to be 34.32/41.92/5.172 billion yuan respectively, net profit of the mother is 311/382/486 million yuan respectively, and the corresponding PE is 22.1/18.0/14.2X respectively. The company continues to improve its product matrix and enter emerging fields, and is expected to achieve both improvements in valuation and performance, and maintain its “buy” rating.
Risk warning: macroeconomic downturn risk; risk of increased market competition; risk of new fields and new product expansion falling short of expectations.