Time Electric's 2023 annual report was released recently. During the reporting period, the company achieved operating income of RMB 21.799 billion (an increase of 20.88% year-on-year), which was mainly caused by the continued rapid growth of the revenue of emerging equipment products. Net profit attributable to the parent company was RMB3.106 billion (up 21.51% year-on-year), mainly due to the increase in gross profit resulting from the increase in operating income. The basic earnings per share of RMB 2.19 yuan/share (up 21.67% year-on-year) and the weighted average return on equity of 8.70% (up 1.09 percentage points year-on-year) were mainly attributable to the increase in net profit of the parent company.

Discuss and analyze the future development of the company

(1) Industry pattern and trend

As an important part of the modern transportation system and a major livelihood project, railway has made important contributions to promoting economic recovery and facilitating people's travel, and the railway passenger and freight markets have entered a recovery cycle. According to the Outline of Railway Planning for China's Transportation Power in the New Era, by 2035, China's railway network will reach about 200,000 kilometers, including 70,000 kilometers of high-speed rail, and cities with a population of more than 200,000 will be covered by rail, including cities with a population of more than 500,000. The coordinated regional development strategy was further implemented, and the state deployed "new infrastructure", accelerated rail transit networks in urban clusters and metropolitan areas, and promoted urban (suburban) rail in metropolitan areas

Major strategies such as accelerated development of roads, intercity, urban (suburban) railway development will usher in growth. The stock of rail transit equipment continues to grow, and the equipment continues to enter the maintenance period, and the maintenance and maintenance market is expected to grow further. In terms of competition pattern, Beijing Zongheng Electromechanical Technology Co., LTD., a subsidiary of the Railway Academy, maintains a strong competitiveness in the market of traction converter system of bullet trains with relatively rich experience in product development, production and loading. In addition, CRRC Sifang, CRRC Yongji Electric Motor Company, CRRC Dalian and CRRC Dalian Electric Traction Company are also engaged in rail transit traction converter system related business, which has a certain competitive relationship with some of the company's businesses.

The overall trend of urban rail transit construction is slowing down, the debt ratio of local governments is high, the fiscal policy is shrinking significantly, and the investment in urban rail construction is declining year by year. In order to prevent the hidden debt risks of local governments, the government has strictly controlled the investment in urban rail transit construction, and metro cities have postponed or stopped the construction of less than half of the projects that are currently invested. Under the overall slowing trend of subway construction, urban areas, medium and low traffic volumes and maintenance and maintenance may usher in development opportunities. At the same time, in the context of the national strategy of carbon peak carbon neutrality, China Urban Rail Transit Association issued the "Action Plan for the Construction of Green Urban rail in China Urban Rail Transit", which clearly put forward the requirements for the construction of green urban rail, and the intelligent and low-carbon integrated solution products of urban rail transit in the future are increasingly favored by users. In terms of competition pattern, relying on deep cooperation with owners in some regions, Jiangsu Jingwei Railway has gained a lot in Shenzhen, Nanjing and Jinan markets in 2023, with obvious growth momentum; In addition, with the complete set of traction converter technology imported from Bombardier, Xinyu Bombardier has a certain competitiveness in the urban rail traction converter system market.

To achieve carbon peak and carbon neutrality is a broad and profound economic and social systemic change. With the deepening of the national "dual carbon" strategy, hundreds of billions of new energy markets with great growth potential have been spawned. Solar hydrogen storage equipment and photovoltaic engineering, automotive electric drive, semiconductor and sensors and other emerging industries that are highly consistent with the national "dual carbon strategy" are currently developing rapidly, and also provide a broad market space for enterprises. In terms of the competitive pattern, the photovoltaic inverter market oligopoly effect is obvious, of which Huawei Technologies Co., LTD., Sunshine Power Co., LTD., Zhuzhou Converter Technology National Engineering Research Center Co., LTD., Shanghai Electric Co., LTD., TBEA Electric Co., LTD., the market share of more than 90%. In the wind power converter market, the market share of Sunshine Power Co., LTD., Shenzhen Hewang Electric Co., LTD., and Xinjiang Goldwind Technology Co., Ltd. is significantly ahead of other players in the industry, in addition to enterprises such as Reneng New Energy Technology (Tianjin) Co., LTD., Guangdong Rifeng Cable Co., LTD. In 2023, the company's automotive electric drive industry continues to stabilize the top six in the industry, but faces fierce competition from automakers (BYD, Tesla) and independent suppliers (Shenzhen Huichuan Technology Co., LTD., NIDco Co., LTD.), and the market share of the top four competitors is as high as 54%. In the power semiconductor market, in the fields of automotive, photovoltaic and wind power, Star Semiconductor Co., LTD., which started with the "Infineon chip + self-operated package" model, continues to make efforts in the domestic IGBT market; In addition, the international leading enterprises represented by Infineon Technologies have, after long-term accumulation, taken the lead in layout and occupied the heights of technology and market. In the sensor market, LEM's power sensor ranks first in the world and has always been the industry benchmark; In addition, the domestic Ningbo Ximagnetic Electronic Technology Co., Ltd. has developed rapidly in the power sensor market segment in recent years.

(2) The company's development strategy

The company adheres to the concept of "high quality management, high efficiency operation", adheres to the strategy of "concentric diversification", uses "wisdom to empower", deeply cultivates the field of rail transit, takes the trend of "double carbon", innovates and develops strategic emerging industries; The company always adhere to the market-oriented, give full play to the vertical integration ability of the industrial chain and cross-professional technical advantages, and promote multi-system synergy and complementarity and innovation integration; Through digital transformation, we will further deepen the fine management, continuously optimize the allocation of resources, improve efficiency and efficiency, create sustainable value for shareholders, fully realize the steady development of the company, and accelerate to become the world's preferred supplier of comprehensive electrical system solutions in the field of transportation and energy.

(3) Business plan

 Driven by quality innovation and empowered by reform, we will achieve steady and coordinated growth in scale and benefits.