Core views:
Incident: The company announced its 2023 annual report. In 2023, it achieved operating income of 1,232 billion yuan, an increase of about 34.24% year on year; realized total profit of 135 million yuan, an increase of about 139.44% year on year; realized net profit of 142 million yuan, an increase of about 78.11% year on year.
Comment: The company's civilian products and overseas markets grew rapidly in '23. Looking forward to the major aerospace business being highly flexible and the civilian products business is expected to achieve continuous breakthroughs under batch production of new models in '24. Revenue maintained relatively rapid growth. According to estimates, 23Q4 achieved revenue of 490 million yuan, with year-on-year and 62% year-on-month increases, mainly due to expansion of production capacity and expansion of market applications. By business, customized 3D printing products, self-developed 3D printing equipment, and 3D printing raw materials achieved operating revenue of 629, 5.29, and 64 million yuan in 2023, up 34.45%, 26.46%, and 98.98% respectively over the previous year. This is mainly due to the company's continued deep cultivation in the aerospace field and continuous development of new markets and application fields. In overseas regions, the company achieved revenue of 51 million yuan, an increase of 118.46% over the previous year. We judge that overseas growth is expected to continue in 24 years, mainly because the company signed distribution agreements with many overseas customers in the second half of '23. On the profit side, the cost of restoring equity incentives (the cost of equity incentives for 22-23 was about 160 million yuan and 80 million yuan, respectively). The company's net profit for 22 and 23 was 2.42 and 2.20, respectively, and net interest rates after restoration were 26% and 18%. In 2023, the company's gross margins in the aerospace and industrial sectors were 53.68% and 43.93% respectively, a year-on-year decrease of 3.46 and 5.99 percentage points from the previous year, respectively. It is mainly due to the expansion of the scale of operations, which has led to significant increases in material costs, asset depreciation, and employee remuneration. On the expense side, sales expenses, management expenses, and R&D expenses increased by 11.68%, -31.67%, and 24.51%, respectively; accounts receivables and notes reached 1,027 billion yuan at the end of 23, Yoy +56.09%, causing the company's credit impairment losses to increase by about 15 million yuan over the same period last year.
Profit forecast and investment advice: We expect the company's EPS to be 1.59/2.53/3.80 yuan/share in 2024-26, maintaining the judgment of a reasonable value of 99.08 yuan/share, corresponding to a 24-year PE of 62 times, maintaining an “gain” rating.
Risk warning: increased production capacity to absorb risks; downstream concentration, etc.; increased competition risks, etc.