Sytech(SH:600183) Changjiang Securities·2024-04-01 16:00Investment Rating - The report maintains a "Buy" rating for the company [5]. Core Views - The company reported a revenue of 16.586 billion yuan in 2023, a year-on-year decline of 7.93%. The net profit attributable to the parent company was 1.164 billion yuan, down 23.96% year-on-year. The net profit after deducting non-recurring gains and losses was 1.092 billion yuan, a decrease of 23.57% year-on-year. The gross margin and net margin were 19.24% and 6.93%, respectively [4]. - The decline in revenue is attributed to the downturn in the copper-clad laminate (CCL) industry and intensified market competition. Although the sales volume of CCL increased year-on-year, the product prices fell significantly, leading to a decrease in revenue and gross margin for the CCL segment [4]. - The PCB (Printed Circuit Board) business also faced challenges due to declining demand and fierce competition, resulting in a revenue drop of 7.90% year-on-year, with a gross margin of 11.13%, down 10.47 percentage points [4]. - The company has a strong position in the CCL industry, ranking second globally with a stable market share of around 12%. The company has developed a full range of high-frequency products and is well-positioned to benefit from the upcoming recovery in demand, particularly in AI servers and high-speed CCLs [5]. Summary by Sections Financial Performance - In 2023, the company achieved total revenue of 16.586 billion yuan, with a gross profit of 3.191 billion yuan, resulting in a gross margin of 19% [9]. - The projected revenues for 2024, 2025, and 2026 are 18.673 billion yuan, 21.143 billion yuan, and 23.349 billion yuan, respectively, with corresponding net profits of 1.691 billion yuan, 2.111 billion yuan, and 2.383 billion yuan [9]. - The company’s earnings per share (EPS) for 2023 was 0.50 yuan, with projections of 0.72 yuan, 0.90 yuan, and 1.01 yuan for the following years [9]. Market Position and Outlook - The company has invested significantly in technology and product development, particularly in high-frequency and high-speed CCLs, which are expected to see increased demand due to advancements in AI and telecommunications [5]. - The report anticipates that the company will benefit from a potential price increase in CCLs as the market stabilizes, with a recovery expected in the high-speed CCL segment [5].