YINGHE TECHNOLOGY(300457) 光大证券·2024-05-04 06:08Investment Rating - The report upgrades the company's rating to "Buy" due to the strong performance of its subsidiary SKELE and the enhanced certainty of its 2024 Q1 earnings [4] Core Views - The company's 2023 revenue reached 9.75 billion yuan, a year-on-year increase of 8.09%, with net profit attributable to the parent company of 554 million yuan, up 13.62% year-on-year [4] - In 2024 Q1, the company achieved revenue of 1.866 billion yuan, a year-on-year increase of 7.37%, and net profit attributable to the parent company of 159 million yuan, a year-on-year increase of 53.87% [4] - The lithium battery equipment business saw a decline in revenue by 25.01% to 6.408 billion yuan in 2023, but the average price per unit increased by 19.16% to 4.62 million yuan per unit [4] - The subsidiary SKELE achieved revenue of 3.341 billion yuan in 2023, a year-on-year increase of 512%, with a net profit of 1 billion yuan, up 1071% year-on-year [4] - The company has successfully expanded its customer base in the automotive sector, securing orders from major companies such as Volkswagen, Aion, Zeekr, Li Auto, and Geely [4] - The company has made breakthroughs in the UK and European markets, with its new products obtaining TPD certification and establishing a wholly-owned subsidiary in the UK [4] Financial Performance - The company's 2023 lithium battery equipment gross margin was 19.56%, an increase of 0.61 percentage points year-on-year [4] - SKELE's operating profit margin in 2023 was 35.11%, with a net profit margin of 29.93%, an increase of 14.28 percentage points year-on-year [4] - The company's 2024 Q1 minority shareholder profit was 130 million yuan, a year-on-year increase of 154.78%, with SKELE contributing approximately 265 million yuan in net profit [4] Market and Industry Analysis - The global e-cigarette market is dominated by the US, UK, and Canada, with China being a major exporter, with 2023 e-cigarette exports reaching 11.08 billion USD, a year-on-year increase of 12.48% [4] - The company's lithium battery equipment business has a leading position in the industry, with core products supplied to top battery and automotive companies such as CATL, BYD, LG Energy Solution, and Volkswagen [4] Valuation and Forecast - The report maintains the 2024 net profit forecast at 1.096 billion yuan, but lowers the 2025 forecast by 14.6% to 1.27 billion yuan, and adds a 2026 forecast of 1.462 billion yuan [4] - The current stock price corresponds to a PE ratio of 10x for 2024, 8x for 2025, and 7x for 2026 [4] Key Financial Metrics - The company's 2023 EPS was 0.85 yuan, with a forecasted EPS of 1.69 yuan for 2024, 1.96 yuan for 2025, and 2.25 yuan for 2026 [4] - The company's ROE (attributable to the parent company) was 8.97% in 2023, with forecasts of 15.31% for 2024, 15.38% for 2025, and 15.33% for 2026 [4] - The company's P/B ratio is 1.7x for 2023, with forecasts of 1.5x for 2024, 1.3x for 2025, and 1.1x for 2026 [4]