ZHENHUA(000733) Minsheng Securities·2024-04-28 09:00Investment Rating - The report maintains a "Recommended" rating for the company [2][3] Core Views - The company achieved a revenue of 7.79 billion yuan in 2023, representing a year-on-year growth of 7.2%, and a net profit attributable to shareholders of 2.68 billion yuan, up 12.6% year-on-year, aligning with market expectations [1] - In Q1 2024, the company reported a revenue of 1.01 billion yuan, down 51.7% year-on-year, and a net profit of 100 million yuan, down 86.1% year-on-year, which was below market expectations due to a decline in high-value product sales [1] - The company focuses on its core business in electronic components, with significant growth in its subsidiary, Zhihua Yongguang, which reported a revenue of 2 billion yuan, up 41.1% year-on-year, and a net profit of 980 million yuan, up 49.4% year-on-year [1] Financial Performance Summary - In Q4 2023, the company achieved a revenue of 1.76 billion yuan, a year-on-year increase of 12.4%, and a net profit of 620 million yuan, up 20.2% year-on-year, with a net profit margin of 34.4%, the highest level in history [1] - The gross profit margin for 2023 decreased by 3.4 percentage points to 59.3%, while the net profit margin increased by 1.7 percentage points [1] - The company’s operating cash flow increased by 50% year-on-year to 1.23 billion yuan in 2023, primarily due to an increase in cash received from sales [1] Future Earnings Forecast - The company is expected to achieve net profits of 2.29 billion yuan, 2.71 billion yuan, and 3.17 billion yuan for the years 2024, 2025, and 2026, respectively, with corresponding PE ratios of 12x, 10x, and 9x [2][3]