OKE(SH:688308) SINOLINK SECURITIES·2024-04-09 16:00Investment Rating - The report maintains a "Buy" rating for the company, anticipating significant growth in the upcoming years due to overseas expansion and comprehensive package solutions [2][18]. Core Insights - The company experienced a notable decline in profits in 2023, with a revenue of 1.026 billion RMB, down 2.73% year-on-year, and a net profit of 166 million RMB, down 31.43% year-on-year [29][30]. - The company is expected to see positive changes in 2024, driven by increased overseas sales and the rollout of comprehensive tool package solutions, which are projected to contribute significantly to revenue growth [2][30]. - The average export price of CNC tools is higher than the overall average price, which is expected to enhance the company's overall pricing power [29][30]. Summary by Sections Financial Performance - In 2023, the CNC tool business generated revenue of 579 million RMB, a decrease of 9.98% year-on-year, with sales volume dropping by 11.41% to 87.73 million pieces. The gross margin for CNC tools was 40.42%, down 7.1 percentage points [29]. - The hard alloy business saw revenue growth of 9.98% to 445 million RMB, but the gross margin also declined by 5.3 percentage points, impacting overall profitability [29]. - The net profit margin for 2023 was 16.17%, reflecting a decrease of 6.77 percentage points year-on-year [29]. Future Projections - The company is projected to achieve net profits of 208 million RMB, 246 million RMB, and 283 million RMB for the years 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 15X, 13X, and 11X [2][4]. - Revenue is expected to grow significantly in 2024, with a forecasted increase of 21.82% to 1.25 billion RMB [4]. Market Position and Strategy - The company is actively expanding its overseas market presence, with overseas sales reaching 140 million RMB in 2023, accounting for 19.27% of CNC tool revenue [29]. - The comprehensive tool package solutions are entering a phase of mass promotion, which is anticipated to further enhance revenue contributions in 2024 [30].