Core views

The company achieved revenue of 1.01 billion yuan in 2023, +58% year-on-year, and net profit of 100 million yuan to mother, +131% year-on-year. 2024Q1 achieved revenue of 180 million yuan, +50% year-on-year, -56% month-on-month, and net profit to mother of 0.077 million yuan, -51% year-on-year and -79% month-on-month. Benefiting from the high overall demand in the charging pile industry, in 2023, the company's charging module business achieved revenue of 650 million yuan, +110% year-on-year, gross profit margin of 27.7%, and +12.1pct, achieving significant improvements. It mainly benefited from increased automation levels and continued development of overseas customers with high gross margins. Currently, the company has obtained CE certification and UL certification, and various products have entered the European and North American markets.

occurrences

The company publishes its 2023 annual report and 2024 quarterly report.

In 2023, the company achieved revenue of 1.01 billion yuan, +58% year on year, net profit of 100 million yuan, +131% year on year after deduction; of these, 2023Q4 revenue was 410 million yuan, +64% year over month, +50% month on month, net profit to mother 0.36 billion yuan, +48% year over month, +18% month on month, minus 0.29 million yuan year on year, +160% year over month.

2024Q1 achieved revenue of 180 million yuan, +50% year-on-year, -56% month-on-month, net profit of 0.077 million yuan, -51% year-on-year, -79% month-on-month, minus 0.068 million yuan, +61% year-on-month, and +12% month-on-month.

Brief review

Charging module business: The revenue scale increased year on year, and gross margin improved significantly year on year.

In terms of revenue, benefiting from the high overall demand in the charging pile industry, the company's charging module business achieved revenue of 650 million yuan in 2023, +110% over the same period last year.

In terms of gross margin, the company's charging module business had a gross profit margin of 27.7% in 2023, with a year-on-year improvement, mainly benefiting from: 1) Increased level of automation: the company has a standard fully automatic SMT assembly line, fully automatic gluing line, etc., and introduced a new fully automatic assembly line body to improve production efficiency; 2) Continued development of overseas customers with high gross margins: In 2023, the company continued to increase investment and customer development efforts in Europe, America, Southeast Asia and other regions. It has now obtained CE certification and UL certification, and many products have entered European and North American markets.

In terms of products, in 2023, while maintaining the first-mover advantage of the 20kW State Grid “Six Unification” module products, the company launched 30kW and 40kW cost-effective products. The architecture began to use silicon carbide extensively, and derived solutions combining storage and charging, low-power DC fast charging, and liquid cooling.

Smart grid business: Revenue increased 37% year over year, and gross margin remained stable.

In 2023, the company's smart grid business revenue was 177 million yuan, +37% year over year, gross profit margin 38.7%, and +0.3 pct year over year, which remained stable. The company's main products in this field include power operation power supplies, power distribution automation terminal power management modules, and UPS/inverter power supplies. Among them, power operation power module products include DC 220V and 110V voltage levels, self-cooling and air cooling, and multiple power levels such as 0.8 kW, 1.5 kW, 3 kW, 6 kW, 9 kW, 12 kW, etc., and the market share has been in a leading position in the industry for a long time, and the competitive pattern is relatively stable.

Special power supply business: Revenue was under year-on-year pressure, and gross margin remained high.

In 2023, the company's special power business revenue was 124 million yuan, -15% year-on-year, gross profit margin 52.3%, and -0.6 pct year-on-year, which remained stable. In the special field of aerospace, the subsidiary Howell Power's current products are mainly small to medium power power modules, power modules and customized power supplies. It continues to build product capabilities and increase investment in technology research and development.

Profit forecast: The company's net profit is expected to return to mother in 2024-25 to 150 million yuan, corresponding to 21 or 15 times PE.

Risk analysis

1) Downstream charging pile production and sales fall short of expectations: Charging module downstream charging piles may be affected by channel removal, weak demand, etc., causing industry sales to fall short of expectations.

2) Overseas policy uncertainty: In recent years, the US government has successively introduced relevant policies to raise trade barriers, such as requirements for charging pile assembly sites and the origin of a certain percentage of components, etc., which may cause domestic related industrial chains to go overseas less than expected.

3) The company's key projects fall short of expectations: As a participant in the new energy circuit, the promotion of key projects is the key to supporting revenue and profit, and is also a reflection of the company's growth. Failure to advance key projects as expected will affect current and long-term performance.