HGTECH(000988) 山西证券·2024-04-07 16:00Investment Rating - The report maintains a "Buy-A" rating for Huagong Technology (000988.SZ) [2][7] Core Views - The company's perception business shows strong performance, while the connection business has seen a significant decline in revenue. The intelligent manufacturing segment is under slight pressure [1][2] - The company achieved a total revenue of 10.208 billion yuan in 2023, a year-on-year decrease of 15.01%, but the net profit attributable to shareholders increased by 11.14% to 1.007 billion yuan [2][4] - The report highlights the potential growth in the connection business due to high-speed optical modules and the sustained growth in the perception business driven by the penetration of new energy vehicles [3][4] Financial Performance - In 2023, the company's gross margin and net margin improved, with gross margin at 23.11% and net margin at 9.78%, reflecting an increase of 4.05 and 2.37 percentage points year-on-year [2][3] - The revenue breakdown shows that the laser processing equipment accounted for 31.25% of total revenue, the optical devices for 30.47%, and the sensitive components for 31.82%, with the latter experiencing a 40.02% year-on-year growth [1][2] - The company’s R&D expenses reached 750 million yuan in 2023, a 32.51% increase year-on-year, indicating a strong commitment to innovation [3][5] Future Outlook - The company is expected to benefit from the growth in the connection business with the introduction of 800G and above high-speed optical modules, while the perception business is likely to maintain high growth due to the increasing penetration of new energy vehicles [3][4] - Profit forecasts for 2024-2026 indicate net profits of 1.31 billion yuan, 1.68 billion yuan, and 1.94 billion yuan, representing year-on-year growth rates of 29.9%, 28.1%, and 15.5% respectively [3][4]