NNCC(SH:600435) Minsheng Securities·2024-04-17 14:30Investment Rating - The report maintains a "Recommended" rating for the company [7][8]. Core Views - The company reported a revenue of 3.56 billion yuan in 2023, a year-over-year decrease of 7.2%, primarily due to tax policy adjustments. However, the net profit attributable to shareholders increased by 3.9% to 192 million yuan, indicating steady economic performance [7]. - The company expects a revenue growth of 6.6% in 2024, projecting a total revenue of 3.8 billion yuan and a profit of 290 million yuan, reflecting a 3.2% increase [7]. - The gross margin for dual-use military products improved, with a gross margin increase of 2.71 percentage points to 24.2% despite a revenue decline of 7.3% [7]. Financial Forecasts - Revenue projections for 2024, 2025, and 2026 are 4.67 billion yuan, 6.11 billion yuan, and 7.93 billion yuan, respectively, with growth rates of 31.1%, 30.7%, and 29.9% [3][9]. - Net profit attributable to shareholders is forecasted to be 253 million yuan in 2024, 333 million yuan in 2025, and 436 million yuan in 2026, with growth rates of 31.8%, 31.5%, and 31.0% respectively [3][9]. - The report indicates an improvement in operating efficiency, with an EBIT growth rate of 44.78% in 2024 and a projected net asset return (ROE) of 8.53% in 2024 [6][9]. Operational Insights - The company has effectively improved its operational efficiency, with a net cash flow from operating activities of 200 million yuan in 2023, despite a year-over-year decrease of 57.4% [7]. - The company’s major clients accounted for 79% of total revenue, with the top client contributing 52% of total revenue [7]. - The company is focusing on enhancing its research and development capabilities, with R&D expenses increasing to 6.9% of total revenue in 2023 [7].