Incident Overview
The company released an annual report and quarterly report, with revenue of 5.727 billion yuan, yoy +11.21%, net profit to mother of 1,581 billion yuan, yoy +5.07%, net profit after deducting non-return to mother of 1,221 billion yuan, yoy +0.05%, gross profit margin 39.83%, yoy-4.27pct, net profit margin 27.65%, yoy-1.6pct.
23Q4 revenue of 1,621 billion yuan, yoy +35.56%, qoq +9.75%, net profit of 439 million yuan, yoy +67.52%, qoq +6.81%, net profit net profit of 343 million yuan, yoy +92.56%, qoq +11%, gross profit margin 39.96%, yoy-1.81pct, qoq+0.08pct, net profit margin 27.12%, yoy+5.52pct, qoq-0.75pct; 24Q1 revenue 15.64 billion yuan yoy +31.49%, qoq -3.52%, net profit to mother 433 million yuan, yoy +35.31%, qoq -1.37%, net profit without return to mother 388 million yuan, yoy +57.4%, qoq +10.2%; gross profit margin 40.14%, yoy+0.73pct, qoq+0.2pct, net profit margin 27.73%, yoy+0.77pct, qoq+0.6pct? Revenue grew steadily in '23, and MLCC's performance grew rapidly
By business, the company's electronic components and materials had 23 billion yuan in revenue of 2.96 billion yuan, a year-on-year increase of 50.32%, and a year-on-year decrease of 12.43pct. As the company's MLCC products continued to achieve technological breakthroughs and quality improvements, the overall MLCC business grew rapidly. The decline in gross margin was mainly due to the bottom of MLCC prices. Subsequently, with the restoration of downstream demand, MLCC prices picked up and further breakthroughs in the company's own high-end products. The gross margin is expected to increase further; communication components achieved revenue of 1,987 billion yuan, a year-on-year decline. 19.18%, gross profit margin of 40.4%, down 0.79pct year on year. The decline in revenue was mainly due to global macroeconomic fluctuations. Demand is expected to recover later as the economy warms up and new AI-related demand is compounded by new demand related to AI.
Continuously improve product capabilities to help the company accelerate growth
The company takes “material+structure+function” as the development direction to form a diversified product structure focusing on products such as communication components, electronic components and materials, and ceramic fuel cell components. 1) MLCC products: Achieve technological breakthroughs and complete mass production with a dielectric layer thickness of 1 micron. The number of stacked layers reaches more than 1000 layers, and the products cover mainstream specifications from 0201 to 2220 sizes. With product technology breakthroughs and quality improvements, the market recognition of the company's MLCC products has increased significantly, and downstream application fields are becoming more and more extensive. 2) Communication components: According to market demand, the company adjusts product strategy plans in due course, continuously carries out new product research and development, process improvement and cost control, continues to expand new specifications, develop product solutions adapted to market changes, meet customer needs, and consolidate product market position. 3) SOFC: The 50kW SOFC cogeneration system successfully developed by the company. The power density of this next-generation system has increased by 43%, and reliability tests have been carried out for more than 2,000 hours. The initial power generation efficiency has reached 65%, and the cogeneration efficiency has reached more than 90%. It is currently the SOFC system with the highest stand-alone power and power generation efficiency in China.
Investment advice
Considering macroeconomic uncertainty, we expect the company's net profit to be 19.29/25.14/2,923 billion yuan in 2024/2025/2026 (previously estimated net profit to be 24.05/31.11 for 2024/2025, respectively). According to the 2024/4/26 closing price, PE is 26/20/17 times, maintaining a “buy” rating.
Risk warning
New production capacity falls short of expectations, downstream demand falls short of expectations, risk of insufficient funding for project construction in a timely manner, and risk of fluctuations in the surrounding environment.