SIFANG(SH:601126) Soochow Securities·2024-03-19 16:00Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a revenue of 5.75 billion yuan for 2023, a year-on-year increase of 13%, and a net profit attributable to shareholders of 0.63 billion yuan, up 15% year-on-year [2] - The company's performance aligns with market expectations, with a focus on stable growth and operational efficiency [2] - The company is expanding its market presence in both traditional and new energy sectors, with significant growth in automation and distribution products [2] - The report highlights strong cash flow and a healthy order backlog, indicating a positive outlook for long-term stability [2] Summary by Sections Financial Performance - The company achieved a gross margin of 34.44% in 2023, an increase of 2.29 percentage points year-on-year [2] - The net profit margin for 2023 was 10.91%, reflecting a slight increase of 0.21 percentage points year-on-year [2] - The company expects net profits for 2024-2026 to be 0.73 billion, 0.91 billion, and 1.05 billion yuan respectively, with growth rates of 17%, 24%, and 16% [2][9] Business Segments - The automation segment generated revenue of 2.92 billion yuan in 2023, with a gross margin of 41.89% [2] - The new energy segment is projected to maintain a growth rate of over 20% in 2024, driven by significant project wins [2] - The company is actively exploring new technologies in green hydrogen and flexible interconnection systems [2] Cost Management - The report notes effective cost control, with operating cash flow increasing by 74% year-on-year to 1.23 billion yuan [2] - The company’s total liabilities to assets ratio stands at 55.45%, indicating a stable financial structure [2][14]