Jinwu Financial News | According to Guoyuan International Development Research, in 2023, Weisheng Holdings (03393) achieved revenue of RMB 7.252 billion, an increase of 24% over the previous year; net profit attributable to company owners was RMB 521 million, up 61% year on year, basic profit per share was 52.7 points, and a dividend of HK$0.28 per share (equivalent to RMB 0.258, payout ratio of about 49%).
According to the bank, the company's performance growth performance is good. The decline in dividend payout ratio mainly takes into account the increase in capital expenditure in 2024. The subsequent dividend ratio is expected to remain at 50% or more of earnings per share. In 2024, the company's capital expenditure was approximately RMB 670 million, of which the electric AMI business capital expenditure was RMB 150 million, mainly for the construction of the new phase of the plant in Mexico and construction expenses in Hungary; the capital expenditure for the communications and fluid AMI business was RMB 130 million; and the capital expenditure for the ADO business was RMB 390 million, mainly for the construction of intelligent production lines for energy storage and capital expenses for the construction of the Mexican factory.
According to the bank, the company's overseas market share remains stable. Of the 7.9 billion on-hand orders, 2.5 billion is overseas business (including 1.2 billion for electricity, 1.2 billion for telecommunications, and 100 million for ADO). Overseas revenue is expected to grow by 30% or more in 24 years, with the Mexican market +50% and other markets +15%. The Hungarian plant is expected to be put into operation in July-August '24, and revenue will contribute in the fourth quarter. Overall, the high growth of the overseas business continued from 24 to 25; at the same time, after the ADO business starts operation of the intelligent energy storage production line, revenue growth will accelerate and lead to an increase in gross margin, and the company's overall performance growth momentum will improve.
The bank said that in '23, the company's net interest rate increased 1.8 percentage points to 10.5%; ROE increased 3.7 percentage points to 14.7%, and the increase in profitability will help raise the company's valuation level. The bank raised the company's target price to HK$7.88, which is equivalent to 10 times and 7.4 times and PE in 2024 and 2025. There is room for a 46% increase in the target price compared to the current price, maintaining the purchase rating.