Full-year results were in line with expectations, with net profit attributable to the parent company up 78%. In 2023, the company achieved revenue of 6.668 billion yuan (yoy plus 40.50%), net profit of 0.505 billion yuan (yoy plus 78.15%), deduction of non-net profit of 0.481 billion yuan (yoy plus 104.92%), gross sales margin of 22.81 (yoy plus 2.52pct.), deduction of non-sales net interest rate of 7.21 (yoy plus 2.27pct.).

fourth quarter results hit a record high, profitability continued to improve. In the fourth quarter of 2023, the company realized a revenue of 1.895 billion yuan (year-on-year +21.59%, month-on-month +0.79%), a net profit of 0.171 billion yuan (year-on-year +48.76%, month-on-month +20.56%), a gross profit margin of 24.45 (year-on-year +2.1pct., month-on-month +1.67pct.), and a net profit margin of 8.96 (year-on-on-on-month +1.45pct).

new orders to maintain a high growth rate, overseas new orders close to 2 billion yuan. In 2023, the company realized overseas order revenue of 1.991 billion yuan, up 119.18 year on year. In 2023, the company's new orders were 7.832 billion yuan (excluding tax), up 35.14 percent YoY, of which overseas new orders were 1.991 billion yuan, up 119.18 percent YoY. 23 years of new expansion of nearly 100 overseas customers, in power generation and power supply, industrial enterprises electrical support, new infrastructure and other areas of rapid growth. Companies to grasp the global power equipment demand boom cycle, overseas business performance outstanding.

digital power internal cost efficiency, continue to gain external orders. Since 2019, the company has been promoting the construction of digital transformation. At present, all digital factories in Wuhan base have been fully put into operation. Based on the independent research and development of industrial Internet platform JSTDFPlat3.0 and enterprise service bus platform Vportal, the company has realized seamless connection between systems and automation of information flow, and significantly improved production efficiency. The company has received more than 0.6 billion yuan of orders for digital solutions, and the company's digital solution products have been generally recognized by the market.

continuous deep ploughing and polishing advantage products, high-end liquid-immersed transformer successfully offline. At present, the company can provide 72.5kV and below dry-type transformers and liquid-immersed transformers with voltage levels of 145kV and below and capacity of 60MVA and below. The company's 72.5kV products have been successfully applied to offshore and onshore wind power, and the "17MVA/66kV offshore wind electro-liquid immersion transformer" has been successfully offline. The company took the lead in developing the industry's first land 10MW unit supporting 35kV step-up dry-type transformer and successfully connected to the grid.

Risk Warning: Upstream raw materials prices rise sharply; market competition intensifies; overseas market development is not as expected.

investment advice: downgrade earnings forecast, maintain "buy" rating.

taking into account the energy storage industry competition and the company's digital solutions product delivery pace, slightly cut 24-year earnings forecast. It is expected to achieve a net profit of 7.54/10.68/1.348 billion yuan in 2024-2026 (the original forecast for 24-25 is 8.01/1.024 billion yuan), and the current share price corresponds to PE of 23/16/13 times, maintaining the "buy" rating.