The full-year results exceeded expectations, with a proposed cash dividend of 290 million yuan. In 2023, the company achieved revenue of 15.293 billion yuan (YoY +15.83%), net profit to mother of 523 million yuan (YoY +41.06%), gross sales margin of 11.29% (-0.25pct.) , net profit margin of 3.19% (year-on-year +0.66pct.) In 2023, the company plans to distribute cash dividends of 291 million yuan, an increase of 13.2% over the previous year.
Fourth-quarter results reached a record high, and the profitability of the main business remained stable. In the fourth quarter of 2023, the company achieved revenue of 4.309 billion yuan (YoY +19.66%, +3.11%), net profit to mother of 164 million yuan (+54.05% YoY, +34.43%), gross sales margin of 11.18% (YoY -1.11pct). , +0.15pct month-on-month.) , net profit margin of 4.21% (year-on-year +0.77pct. , +0.81pct month-on-month.)
Magnet wire revenue has increased significantly, and overseas revenue has achieved relatively rapid growth. By region, in 2023, the company achieved domestic revenue of 14.88 billion yuan, +15.58% year-on-year, and foreign revenue of 413 million yuan, or +25.68% year-on-year.
By product, the company achieved wire and cable revenue of 10.099 billion yuan, +13.04% year over year, gross profit margin of 11.36%, or -0.17pct year on year. ; Magnetic wire revenue was 5,020 billion yuan, +27.20% year over year, gross profit margin 10.54%, -0.38 pct.
Electromagnetic wire sales exceed 70,000 tons, and transformers and new energy vehicles resonate with the boom. In 2023, the company's electromagnetic wire sales reached 70,500 tons, up 23% year on year. Among them, flat transformer wire sales increased by about 25% year on year, and orders for UHV flat wire were saturated, and the year-on-year increase was more than 2 times. Sales of flat wire motors for new energy vehicles grew rapidly. Throughout the year, 16 new mass production projects were added, 22 new targeted projects were added, and conductive battery pack products were developed and supplied to major domestic battery pack companies.
The performance of electromagnetic wires and cables both increased, and preferential tax policies increased profits. The company's electromagnetic wire product center achieved net profit of 223 million yuan, an increase of 27.5% over the previous year; the cable industry center achieved net profit of 347 million yuan, an increase of 41.6% over the previous year. Beginning in the fourth quarter of 2023, the company enjoyed an additional 5% VAT tax credit for the country's new manufacturing industry, and the electromagnetic wire and cable business increased net profit by 12 million yuan and 53 million yuan respectively.
Risk warning: Global transformer demand falls short of expectations; capacity construction progress falls short of expectations; raw material prices have risen sharply.
Investment advice: Raise profit forecasts and maintain the “buy” rating.
Profit forecasts were raised slightly, taking into account preferential VAT policies and changes in raw material prices.
The company is expected to achieve net profit of 6.12/736/880 million yuan in 2024-2026 (the original forecast value for 24-25 was 582/727 million yuan). The PE corresponding to the current stock price is 12/10/9 times, respectively, maintaining a “buy” rating.