Zhejiang Dahua Technology (002236) 国元证券·2024-04-22 09:30Investment Rating - Buy | Maintain [1] Core Views - The company achieved steady revenue growth and a significant increase in non-GAAP net profit in 2023, with revenues reaching 32.218 billion yuan, up 5.41% YoY, and non-GAAP net profit attributable to the parent company reaching 2.962 billion yuan, up 87.39% YoY [2] - In Q1 2024, the company reported revenues of 6.181 billion yuan, up 2.75% YoY, and non-GAAP net profit attributable to the parent company of 501 million yuan, up 25.92% YoY [2] - The company maintained high R&D investment, with 3.967 billion yuan spent in 2023, accounting for 12.31% of revenue, focusing on AI, data intelligence, and cloud computing [3] - The company's innovative business grew rapidly, with revenues of 4.907 billion yuan in 2023, up 19.20% YoY, and a gross margin of 35.41% [3] - The company has built a comprehensive algorithm training system, including the Xinghan visual model, which supports multiple industries such as energy and water resources [4] Financial Forecasts - Revenue is projected to grow to 35.246 billion yuan in 2024, 38.351 billion yuan in 2025, and 41.571 billion yuan in 2026 [5] - Net profit attributable to the parent company is expected to reach 3.717 billion yuan in 2024, 4.308 billion yuan in 2025, and 4.808 billion yuan in 2026 [5] - EPS is forecasted to be 1.13 yuan in 2024, 1.31 yuan in 2025, and 1.46 yuan in 2026, with corresponding P/E ratios of 15.33x, 13.23x, and 11.85x [5] Business Segments - Domestic TO G business revenue was 4.333 billion yuan in 2023, up 0.18% YoY [2] - Domestic TO B business revenue was 9.087 billion yuan in 2023, up 9.92% YoY [2] - Domestic other business revenue was 3.471 billion yuan in 2023, up 8.24% YoY [2] - Overseas business revenue was 15.327 billion yuan in 2023, up 3.80% YoY [2] R&D and Innovation - The company's software business within its smart IoT products and solutions generated 1.797 billion yuan in revenue in 2023, up 21.59% YoY, with a gross margin of 67.09% [3] - The company has developed a 1+1+N algorithm training system, including offline training machines and an AI training online platform [4] Financial Ratios - Gross margin improved to 42.04% in 2023, up from 37.87% in 2022 [13] - ROE increased to 21.20% in 2023, compared to 9.00% in 2022 [13] - Net profit margin rose to 22.85% in 2023, up from 7.60% in 2022 [13]