This is a listed company that ranks first in the A-share artificial intelligence concept sector, that is, the ability to make money, that is, the return on net assets.
In the first quarter of 2023, the company's return on equity reached 13.8%, which means that as long as the management uses 100 yuan of shareholders' money, through the production and operation of artificial intelligence products, it can earn back 13.8 yuan of net profit after three months.
At present, the company not only masters the core technologies of artificial intelligence such as machine vision, face recognition, big data, AI and AR, but also the most professional artificial intelligence technology and product supplier in China.
Since 2012, the company's annual compensation for employees and executives has increased for 11 consecutive years, and in 2022, it reached a record high of 554 million yuan in compensation. The continuous increase in salary shows that the company is currently in a stage of rapid development, and it is recruiting and expanding outward every year.
However, in the first quarter of this year, the company's non-net profit was only 7.78 million yuan, which shows that more than half of the company's profit is non-operating income, and the translator will explain these details in detail at the end of this article.
At present, the company's stock has recently shown signs of rising after a sharp retracement of 61%, and the price of its stock is just over $7.
Hello everyone, I am an earnings translation officer, today I will investigate the A-share artificial intelligence concept sector, PCITECH (stock code: 600728) this listed company in the first quarter of 2023 financial report, let's enter today's topic.
Main business and core competitiveness
In the company's financial report, the translator learned that PCITECH's main business is the research and development, production and sales of intelligent security and intelligent rail transit.
The company's revenue from ICT products and solutions accounted for 57.31%, and industry intelligent solutions accounted for 37.55%.
In the company's financial report, the translator found that according to the data of the "New Generation Artificial Intelligence Development Plan", by 2025, the construction of a new generation of artificial intelligence in the fields of intelligent manufacturing, smart city and smart medical will be widely used.
The scale of the core industry of artificial intelligence will exceed 400 billion yuan, with a compound annual growth rate of more than 50%. These data are all from the company's financial reports, which also shows that the company's current business is in the industry storm.
In the company's shareholder information, the translator also learned that there are only two natural persons among the top ten circulating shareholders of this company, and the rest are institutional investors, which also shows the recognition of the company by many institutions.
After analyzing the basic information of this company above, let's take a look at the company's net profit performance.
Performance
The following and financial figures are derived from the company's first quarter 2023 report and do not contain any personal opinions.
In the first quarter of 2022, the company's net profit was only 37.06 million yuan. By the first quarter of 2023, the company's net profit reached 1.35 billion yuan, a significant increase of 3,542% year-on-year.
The company's current net profit ranks 5th among the 394 listed companies in the A-share artificial intelligence concept sector. This ranking is very high, indicating that its scale is relatively large.
After looking at the company's net profit performance above, let's analyze the company's price-to-earnings ratio and judge the company's current valuation.
In the first quarter of 2023, the company was trading at 2.7 times earnings. This means that if you buy $10,000 of shares in the company, you can earn $10,000 in dividends after three years.
The company's current price-to-earnings ratio ranks first among the 394 listed companies in the A-share artificial intelligence concept sector, which shows that it is currently in an undervalued state.
At the end of this link, we will analyze the cash flow of the company, the net cash flow generated by operating activities, which is a measure of a company's cash income and expenditure, also known as the touchstone of net profit.
In the first quarter of 2023, although the company's net profit was 1.35 billion yuan, the company's actual net cash received due to operating activities in the same period was -104 million yuan, an increase of 82% year-on-year.
Because in the buyer's market, companies are shipped first and then receive money, which generates account period and accounts receivable, so it is normal for net cash flow to be lower than net profit, or even negative, because the difference between the two is that the payment has not yet been received.
In the first quarter of this year, the company's net cash flow nearly doubled year-on-year, which shows that the company's cash flow has become very abundant compared with the same period last year, and its account has more money, which is very beneficial to the company's production and operation.
To sum up, in the first quarter of 2023, the company is large, cash flow is relatively abundant, and it is currently undervalued.
Reasons for the increase in net profit
Let's enter the most important part of this article, in which the translator will analyze the main reasons for the growth of the company's net profit, I hope you can read it carefully.
After analyzing the main financial data, the translator found that in the first quarter of 2023, the main reason for the increase in the company's net profit was the significant increase in the net profit margin on sales.
In the first quarter of 2022, the company could only earn a net profit of 3.2 yuan from selling 100 yuan of artificial intelligence products, and the net profit margin on sales was 3.2%.
In the first quarter of 2023, the company can also earn a net profit of 123.97 yuan from selling 100 yuan of artificial intelligence products, and the net profit margin of sales has reached 123.97%.
The company's current net sales profit margin ranks second among 394 listed companies in the A-share artificial intelligence concept sector. This ranking is very high, indicating that its net profit margin on sales is relatively not low.
Through the above analysis, we understand that in 2023, due to the significant increase in the company's net profit margin on sales, the company's net profit in the first quarter increased.
Deficiencies
After seeing so many advantages of this company above, let's find fault with it, analyze the company's problems and flaws, and the translator will give you a risk warning.
After analyzing the main financial data, the translator found that in the first quarter of this year, the company's biggest problem was the decline in non-net profit.
In the first quarter of 2023, the company's net profit was 1.35 billion yuan. However, the profit generated by operating activities was only 7.78 million yuan, and the rest was non-operating income.
This money may come from the sale of assets, donations or demolition funds, in short, it has nothing to do with production and operation. That is, in the second quarter of 2023, these profits will no longer appear.
Deduction of non-net profit is what can reflect a company's production and operation, and the rest are accidental income and production and operation have nothing to do with it, which requires our attention.
If the fundamentals of listed companies are divided into five grades: A, B, C, D, and E from high to low, the translator personally believes that the company can maintain the level of C grade.
Please note: Stocks of companies with good fundamentals do not necessarily rise. But for stocks that can sustain a big rise, the company's fundamentals must be excellent.
And this article does not recommend the stock of PCITECH, nor does it say how good PCITECH is, but concisely translates the company's financial reports.