Han's Laser is the largest manufacturer of laser processing equipment in Asia, and the company has also successfully developed a proximity lithography machine that has been put into the market, so it also has a lithography machine concept.
On Wednesday, the company's turnover was only 198 million yuan. In the following four trading days, the company's turnover was more than 800 million yuan. Especially last Thursday, the company's turnover reached 1.24 billion yuan, six times that of last Wednesday, which may indicate that it has gained attention recently.
After analyzing the company's financial reports, the translator found that the reason why the company has gained attention recently is that the company's net profit in the first quarter of this year has increased significantly. (At the end of this article, the translator will analyze the valuation of this company in detail, and only after looking at the valuation of the company can you really understand the value of this company.) )
Since 2022, the company's historical net profit has declined for two consecutive years, and in 2023, it will only complete a net profit of 820 million yuan.
In 2024, the company has made a qualitative leap, and the company has completed a net profit of 989 million yuan in only one quarter, a significant increase of 594% year-on-year, and the growth of this company's net profit this year has been achieved ahead of schedule.
The company's current net profit ranks first among the 86 listed companies in the lithography machine concept sector, which shows that it is currently the largest enterprise in the sector.
However, after further analysis, the translator found that although the company's net profit was rising, its cash flow capacity showed signs of weakening.
In the first quarter of 2024, although the company's net profit was 989 million yuan, the company's actual net cash received from the sale of laser equipment in the same period was -310 million yuan, a year-on-year decrease of 32%.
Because under the accrual accounting system, the company ships the goods first and then collects the money, which creates an account period, so it is normal for the net profit to be higher than the actual net cash received from the sale of goods.
However, the net cash generated by the company's operating activities decreased year-on-year, indicating that compared with the same period last year, the company's cash flow ability has shown signs of weakening, and the money in its account has also decreased, which is very unfavorable to the company's production and operation.
Because in the first quarter of this year, the company's net profit increased significantly, so the management also expanded its production capacity during the reporting period.
At present, the company has a project to renew the Altran Industrial Park and a project to build a regional headquarters base in East China, and the total estimated investment in these two projects is more than 2.5 billion yuan.
After comparing it with the company's existing production capacity, the translator found that if both production projects can be completed, the company's production capacity, that is, the ability to produce laser equipment, will increase by more than 70%, which will also lay a solid foundation for its future net profit growth.
Through the analysis of the translator, it was found that at present, the average progress of these two projects has exceeded 30%, which means that as long as the management invests another 1.8 billion yuan, these two projects can be completed.
During the same period, the total amount of cash that the company could take out in the short term, that is, monetary funds, was close to 9 billion yuan, which shows that these projects do not have any financial pressure on the management.
At the end of this article, let's analyze the company's price-to-book ratio and price-to-earnings ratio and determine the company's valuation.
In the first quarter of 2024, the company traded at a price-to-earnings ratio of 5.6x. This means that if the management divides the profits made by the sale of laser equipment to shareholders every year, it will only take 5.6 years for shareholders to return to their capital.
The company's current price-earnings ratio ranks first among the 86 listed companies in the lithography machine concept sector from low to high, which shows that its valuation is very low.
After looking at the price-to-earnings ratio of this company above, let's analyze the company's price-to-book ratio.
In the first quarter of 2024, the company traded at a price-to-book ratio of 1.4x, which means that the company's current market price is 1.4x its cost.
The price-to-book ratio is also called the margin of safety by Warren Buffett, the higher the multiple, the greater the risk, and the lower the multiple, the less risky.
The company's current price-to-book ratio, that is, the margin of safety, ranks 10th from low to high among the 86 listed companies in the lithography machine concept sector. This is a very high ranking, indicating that its valuation is relatively low.
Through the above analysis, we understand that in 2024, it will take only one quarter for the company to make a net profit that exceeds last year, and the management has also expanded its production capacity, so the company's net profit this year is likely to hit a record high.
At present, the company's price-to-earnings ratio and price-to-book ratio are relatively high, which indicates that the company's valuation is very low and has future growth.
If the fundamentals of listed companies are divided into five grades from high to low: A, B, C, D, and E, the translator personally believes that the company can maintain a B level.
Please note: companies with good earnings reports do not necessarily rise. But those companies that can continue to rise sharply must have excellent financial reports.
This article is a pure financial report analysis article, and it is not intended to be recommended, and I hope you can refer to it carefully.