Sinocat(SH:688737) East Money Securities·2024-04-08 16:00Investment Rating - The report maintains a "Buy" rating for the company [4][20]. Core Insights - The company has experienced significant growth in revenue and profitability, with a 245% year-on-year increase in revenue to 1.544 billion yuan in 2023, and a return to profitability with a net profit of 42.32 million yuan [13][20]. - The company's gross margin improved to 11.91% in 2023, up 6.33 percentage points year-on-year, while the net margin increased by 22.58% to 2.86% [1][20]. - The company is expanding into emerging markets such as industrial catalysts, hydrogen fuel cells, and solid-state batteries, which are expected to contribute to long-term growth [12][20]. Financial Performance - In Q4 2023, the company reported revenue of 420 million yuan, a year-on-year increase of 207%, and a net profit of 9.47 million yuan, up 127% year-on-year [13][20]. - The sales volume of exhaust catalysts reached 2.979 million units in 2023, a remarkable increase of 168.95% year-on-year [1][20]. - The company anticipates revenues of 2.584 billion yuan, 3.519 billion yuan, and 3.869 billion yuan for 2024, 2025, and 2026, respectively, with corresponding net profits of 129.53 million yuan, 199.29 million yuan, and 260.19 million yuan [20][24]. Market Dynamics - The growth in the natural gas heavy truck market, which saw sales increase by 308% year-on-year to 152,000 units in 2023, has significantly benefited the company's exhaust catalyst business [13][20]. - The company is positioned to capitalize on the domestic substitution trend in catalyst supply, particularly as vehicle manufacturers seek to reduce costs [20][13]. Emerging Business Development - The company has completed the construction of a pilot platform for solid-state batteries, with an annual production capacity of 9,600 soft-pack batteries and 24,000 cylindrical batteries [12][20]. - The company is actively involved in national key research projects related to high-performance fuel cell catalysts, enhancing its technological capabilities [12][20].