WZ Group(600704)2024-05-06 10:00Investment Rating - The report maintains a "Buy" rating for the company [1][3][11] Core Views - The company reported a revenue of 580.16 billion yuan in 2023, a year-on-year increase of 0.6%, while the net profit attributable to shareholders decreased by 7.9% to 3.62 billion yuan [2][10] - The "One Body, Two Wings" strategy is beginning to show results, with significant contributions from the smart supply chain integration services, financial services, and high-end manufacturing sectors [2][3] - The company has strengthened its research and development efforts, increasing R&D expenditure by 41% to over 1 billion yuan in 2023, which has positively impacted the performance of various segments [2][3] Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 580.16 billion yuan, with a net profit of 3.62 billion yuan and an EPS of 0.68 yuan [2][10] - The revenue from the smart supply chain integration services was 542.22 billion yuan, contributing 93.5% to total revenue [2][10] - The high-end manufacturing segment saw a gross margin increase of 3.3 percentage points to 16.8% [2][10] Strategic Developments - The company has acquired a 33% stake in Xintai Life Insurance and completed the acquisition of 82.3% of Qixin Company, a leader in the magnesium industry, which is expected to enhance its financial capabilities and resource control [2][3] - The company sold 71.52 million tons of steel and 37.55 million tons of iron ore in 2023, maintaining a leading position in the supply chain services for metals and energy [2][10] Earnings Forecast - The forecast for EPS from 2024 to 2026 is 0.79, 0.87, and 0.95 yuan, with corresponding PE ratios of 6x, 5x, and 5x [3][10] - The company is expected to see stable revenue growth, with projected revenues of 592.44 billion yuan in 2024, 613.67 billion yuan in 2025, and 639.20 billion yuan in 2026 [10][11]