Description of the event
The company released its 2024Q1 quarterly report, achieving operating income of 206 million yuan, a year-on-year increase of 54.72%, and achieved net profit of 101 million yuan, an increase of 104.72% over the previous year, turning a loss into a profit, achieving net profit deducted from non-mother of -14 million yuan, and narrowing losses.
Incident comments
Net profit reversed losses, and performance exceeded expectations. The company focuses on industrial metal additive manufacturing (3D printing), providing customers with a complete set of metal additive manufacturing solutions, including metal 3D printing equipment, product manufacturing, raw materials and technical services, etc., and has built a relatively complete metal 3D printing industry ecosystem. The overall strength is in a leading position in the field of metal additive manufacturing at home and abroad. The company continues to increase market development efforts and R&D investment, continues to deepen aerospace and other application fields, continue to develop new equipment models, and continuously explore new markets. With the expansion of the company's business scale and market application fields, the 3D printing customized products, self-developed equipment and raw materials business continued to explode, while the aerospace business was repaired, driving rapid revenue growth in 2024Q1. At the same time, payment fees for accrued shares were reduced in 2024Q1, resulting in a loss in net profit attributable to mother. It is expected that throughout 2024, the company's revenue and profit will continue to grow rapidly as production capacity is further released, development is increased in more fields, and share payment fees are further reduced.
Investment in R&D continues to be increased, and the scale of production continues to expand. 2024Q1's R&D expenses have reached 54 million yuan, and the R&D cost rate is over 26%. The company has maintained high R&D investment in recent years, increased R&D and upgrading of equipment, materials, and printing services, and laid the impetus for the company's long-term future development. At the end of 2024Q1, the company's ongoing construction project reached 439 million yuan. After the company decided to increase and land, related production expansion projects began one after another. After completion, it will greatly increase the production capacity of the company's equipment, materials and printing services, better meet market demand, and drive the company's revenue growth.
Gross margin decreased due to changes in product structure. 2024Q1's gross profit margin of 41.25% was the lowest in recent quarters, mainly due to the relatively simple structure of some printing service products this quarter, which caused fluctuations in gross margin during the quarter. It is expected that with the subsequent release of other printing service products, the company's gross margin will be repaired.
The logic of continuous expansion in the downstream sector remains unchanged, and we are optimistic about the company's medium- to long-term development trends. In the non-civilian sector, the company's founding team has a strong industrial background. Combined with the company's leading technology and the layout of the entire industry chain, it is expected to continue to achieve rapid growth. In the civilian sector, as technology matures, cost reduction and efficiency continue to advance, and the penetration rate continues to increase, 3D printing is expected to gradually expand in more application fields. In 2023, the company completed fixed growth and continued to expand production capacity. The company's long-term design output value far exceeds current production capacity, providing support for the company's medium- to long-term development.
The company is expected to achieve net profit of 3.4, 5.0, and 740 million yuan in 2024-2026, corresponding to PE of 48, 32, and 22 times, respectively, maintaining a “buy” rating.
Risk warning
1. The expansion of downstream application areas falls short of expectations;
2. The company's production capacity expansion fell short of expectations.