Incident: The company released its 2023 semi-annual report, achieving operating income of 1,469 million yuan, an increase of 0.27% over the previous year; achieving net profit of 167 million yuan, an increase of 8.18% over the previous year.
2023H1 profit grew steadily, and the comprehensive gross margin rose to a record high. Thanks to the company's strategic layout in the fields of automobiles, new energy, and small household appliances, the company achieved positive revenue growth in the first half of the year. Among them, the auto parts, small appliances, and medical fields increased by 22.43%, 14.31%, and 3.71% year-on-year respectively.
At the same time, the company's business gross margin in the above areas is high, and the gross margin boosted by revenue structure optimization and exchange earnings is obvious. 2023H1's comprehensive gross margin reached 30.71%, which is at the highest level of annual comprehensive gross margin. As the company expands its business in high-value-added fields such as healthcare and industrial control, the overall gross margin is expected to increase further.
Breaking through new markets in various fields, and a comprehensive strategic layout supports future growth: in recent years, the company has continued to lay out in componentized and integrated mechatronics and software products, thereby consolidating technical advantages and expanding business boundaries to achieve the company's long-term development. As of June 30, 2023, the company has made breakthroughs in many fields.
(1) In the field of new energy and automobiles, new products such as automobiles and electronic water pump series for energy storage developed by the company have successfully achieved mass production in the fields of new energy commercial vehicles, energy storage, etc., and also expanded similar products to the data center cooling field. Currently, they are in the customer prototype testing stage; automotive lidar motors have already entered the mass production stage, automotive electric air conditioning actuators and active safety motors have entered the sample testing stage, and automotive electric air conditioning compressor controllers have entered the mass production stage; (2) In the field of home appliances, the company has launched an intelligent dishwasher distribution system solution, and Gree's new products Brushless motors for air conditioners have entered the mass production stage;
(3) In the field of medical devices, voice coil motors for ventilators have been recognized by customers and are in the mass production stage. The above new products have been imported and replaced with key components in the medical device field; (4) In the field of industrial control, miniature sliding screws, planetary ball and roller screws, brushless hollow cup motors, their precision transmission components, and servo motors are also currently in the sample testing stage.
Profit forecasts and investment recommendations. We expect the company's operating income for 2023-2025 to be 34.32/41.92/5172 billion yuan, net profit to parent is 311/382/486 million yuan respectively, and corresponding PE is 28.4/23.2/18.2X, respectively. The company continues to improve its product matrix and enter emerging fields, and is expected to improve both 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.