CAERI(SH:601965) GF SECURITIES·2024-04-26 12:02Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 26.86 CNY per share, unchanged from the previous rating [5]. Core Insights - In 2023, the company's technical service revenue increased by 19.1% year-on-year, while the net profit attributable to the parent company, excluding non-recurring items, rose by 15.8%. The total revenue for 2023 reached 4.007 billion CNY, a 21.8% increase year-on-year, with net profits of 825 million CNY and 750 million CNY for the two categories, reflecting increases of 19.8% and 15.8% respectively [3][8]. - The company is positioned as a rare independent automotive testing institution in China, benefiting from regulatory upgrades and the introduction of new standards that are expected to drive both volume and pricing in the testing business. The long-term outlook includes a transformation into a data service provider and the establishment of an index platform [18]. - The company has a robust business structure with five major divisions: testing engineering, energy power, information intelligence, aftermarket, and equipment, enhancing its operational capabilities and optimizing its national layout [18]. Financial Performance Summary - The company reported a gross margin of 43.0% in 2023, a decrease of 1.1 percentage points year-on-year, primarily due to the increased proportion of lower-margin equipment manufacturing business. The operating expense ratio was 19.5%, up 1.0 percentage points year-on-year [12]. - The company plans to distribute dividends of 3.3 CNY per 10 shares, resulting in a dividend payout ratio of 40.16%, maintaining a high level over the years [12]. - For the first quarter of 2024, the company achieved a revenue of 860 million CNY, a year-on-year increase of 21.8%, with net profits of 160 million CNY and 150 million CNY for the two categories, reflecting increases of 15.2% and 14.1% respectively [3][8]. Earnings Forecast and Investment Recommendation - The company is expected to benefit from the opportunities presented by electric and intelligent vehicle trends, with projected EPS for 2024, 2025, and 2026 at 0.90 CNY, 1.03 CNY, and 1.18 CNY per share respectively [19].