Event: The company released its 2023 annual report. 1) The company achieved revenue of 2,516 million yuan/ -3.9% (YoY, same below), net profit of 329 million yuan/ -21.0% after deducting net profit of 105 million yuan/ -29.7%; 2) 23Q4 achieved revenue of 758 million yuan/ -17.3%, net profit of 39 million yuan/ -83.21%, net profit loss of 41.05 million yuan. 3) The company's operating cash flow in '23 was 318 million yuan, a decrease of loss of $07 billion compared to '22.
By business: In 23, science and technology innovation services/strategic emerging industries achieved revenue of 7.77/1,689 billion yuan, respectively, with year-on-year changes of -8.7%/-2.1%, accounting for 30.9%/67.1% of revenue respectively. Among them, innovation base platform services and science and technology innovation operation services each achieved revenue of 6.76/101 billion yuan, a year-on-year change of -5.6%/-25.2%, respectively. The new materials industry and the digital economy industry achieved revenue of 15.6/120 million yuan respectively, with year-on-year changes of -5.4%/+71.4%, respectively .
Consolidate the dual main business model and deepen the layout, leading to phased pressure on profits. The company deepens the “14th Five-Year Plan” strategic plan and consolidates the “scientific and technological innovation service+strategic emerging industries” business model. In '23, the company's gross profit margin was 24.94% /-4.3pct, net profit margin was 13.08% /-2.8pct, and the period expense ratio was 27.79% /+2.6pct.
Among them, the sales rate/management rate/R&D rate/finance rate were 4.6%/11.6%/5.9%/5.8%, respectively, with year-on-year changes of +0.5pct/-0.1pct/+0.4pct/+1.9pct. The main reasons for the decline in profit were: 1) the company's park carrier sales revenue and new materials industry revenue declined compared to the same period of the previous year; 2) due to market fluctuations, the company's fair value change revenue decreased by 160 million yuan compared to the same period of the previous year; 3) the cost of interest expenses on loans after completion of the company's park carrier construction was completed, leading to an increase in financial expenses compared to the same period of the previous year.
Focus on the transformation of scientific and technological achievements and accelerate the cultivation of characteristic industries and high-quality technology enterprises. 1) Science and technology innovation operation service: The company actively explores the transformation of scientific and technological achievements, transforming scientific and technological achievements from various universities such as Tsinghua University and Shenzhen University; 2) Innovation base platform service: The park revolves around the transformation of “one city, one industry” and actively cooperates with Huizhou SDIC to lay out the new energy and energy storage industry. The Foshan Lihe Project revolves around the NEV materials industry to promote the elimination of innovation carriers as a whole. 3) Investment incubation services: The company strengthens the “earlier, smaller, and more technological” strategy, invests in companies such as Xinton Technology, Yuanjia Biology, Dianshi New Materials, Dai Shengsi Medical, and Hydrogen-Generated Energy; the invested companies have developed steadily, and Xihua Technology, Wuxi Muchuang, Zhongke Xingrui, Carbon Healthcare, etc. have completed a new round of financing; the company and Shenzhen Energy have jointly built a 1 billion Anhui Shenzhen Energy Innovation Fund to invest in strategic emerging fields and innovative hard technology projects; Lijin Electric Group invests in strategic emerging fields and hard technology innovation projects respectively Successfully listed on the Board and GEM.
Cultivate leading high-growth technology companies around strategic emerging industries. 1) Star Technology developed under pressure and initiated upgrading and transformation: The subsidiary overcame the impact of falling overseas demand and reduced export orders, and actively developed new markets. In 2023, Xintuo's perfume bottle cap category saw a marked increase in food packaging customers and sales. Food packaging sales accounted for more than 10% and a year-on-year increase of 30%; it obtained pharmaceutical package production qualifications, laying the foundation for expanding the medical, aesthetic, and health markets. 2) Shuyun Science and Technology, seizing the opportunities of digital China to seek development: The subsidiary Shuyun Science and Technology has won the bid or signed a number of major projects, and the quality inspection of digital models of urban buildings is developing rapidly. The 11 administrative/functional zones in Shenzhen have covered 6 services.
Risk factors: Project construction falls short of expectations, extreme climate risk, risk of adjustment of fees for scenic spots.