DOUBLE ARROW(SZ:002381)2024-04-01 16:00Investment Rating - The report assigns an "Outperform" rating to the company with a target price of RMB 10.65 [17][50]. Core Insights - The company reported a significant increase in net profit excluding non-recurring items (NPEx) by 90.15% year-on-year (YoY) in 2023, with a notable recovery in gross profit margin (GPM) [3][10]. - Revenue for 2023 reached RMB 2.59 billion, representing an 11.03% YoY growth, while the net profit attributable to shareholders (NPAtS) was RMB 242 million, up 112.60% YoY [3][42]. - The company produced 80.32 million square meters of rubber conveyor belts in 2023, marking an 11.02% YoY increase [3][42]. - The fourth quarter of 2023 saw revenue of RMB 738 million, a 15.66% YoY increase, with NPAtS rising 176.68% YoY [3][42]. Financial Performance - The company plans to distribute cash dividends totaling RMB 103 million for 2023, with a proposed cash dividend of RMB 2.50 per 10 shares [49]. - The projected net profits for 2024-2026 are RMB 292 million, RMB 350 million, and RMB 411 million, respectively, with corresponding earnings per share (EPS) of RMB 0.71, RMB 0.85, and RMB 1.00 [18][50]. - The gross profit margin for 2023 was reported at 20.75%, an increase of 3.78 percentage points YoY [3][42]. Capacity Expansion and Future Growth - The company is expanding its conveyor belt production capacity, with a convertible bond project expected to increase capacity to 90 million square meters [24][43]. - The "Smart Manufacturing Base Project," with a total investment of RMB 700 million, is nearing completion, with trial production expected to start soon and phased production anticipated in Q2 2024 [24][43]. - The company aims to distribute at least 30% of the average distributable profit in cash annually over the next three years (2024-2026) [49].