Wenzhou Yihua (SZ:002897) East Money Securities·2024-05-28 08:00Investment Rating - The report gives a rating of "Accumulate" for the company [6]. Core Views - The company has optimized its channel layout and upgraded its products in response to a complex market environment, achieving a revenue of 5.058 billion with a year-on-year increase of 0.96% in 2023. However, the net profit attributable to the parent company decreased by 49.04% to 122 million due to delays in orders from U.S. clients and ongoing construction of its U.S. base [1][19]. - In Q1 2024, the company reported a revenue of 1.528 billion, a significant year-on-year increase of 63%, and a net profit of 86 million, up 456% compared to the previous year. The growth was attributed to the recovery of U.S. customer orders and an increase in European customer orders [5][19]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 5.058 billion, with a gross margin of 17.6%, and a net profit of 122 million, down 49.04% year-on-year. The company’s contract liabilities increased to 257 million from 176 million in the previous year [1]. - For Q1 2024, the company reported a revenue of 1.528 billion, with a gross margin of 17.8%. The net cash flow from operations was 7 million, a recovery from a negative cash flow of 33 million in the same period last year [5]. Business Segments - The company’s photovoltaic bracket business saw a revenue increase of approximately 90%, while the connector business grew by about 20% in Q1 2024. Key clients in the photovoltaic sector include NEXTracker and Trina Solar, while major clients in the connector business include Huawei and ZTE [5][19]. - The company is a leader in the high-speed connector market, focusing on 5G and 6G communications, with products like 5GSFP and SFP+ series connectors already in mass production [15][19]. Future Projections - The company is expected to achieve revenues of 7.389 billion, 8.908 billion, and 10.764 billion for the years 2024, 2025, and 2026, respectively. The net profit attributable to the parent company is projected to be 283 million, 379 million, and 496 million for the same years [9][19].