occurrences

The company released the third quarter report. In the first three quarters of 2021, the company achieved operating income of 9.3 billion yuan, a year-on-year increase of 79%, and net profit of 260 million yuan, an increase of 49% over the previous year; Q3 achieved operating income of 3.7 billion yuan, an increase of 59% over the previous year, and a return profit of 97 million yuan, a year-on-year decrease of 1%, and a year-on-year decrease of 9%.

Brief review

The main business led to performance growth. After deducting inventory in Q3, profits increased month-on-month, and wire and cable orders improved. In the first three quarters, the main wire, cable and electromagnetic wire sector achieved net profit of 368 million yuan, an increase of 71.25% over the previous year, driving the company's performance growth; 50 million+ inventory impairment in the third quarter mainly came from the drop in pork inventory prices in Yunleng Business. After restoration, Q3 profit was 150 million yuan, nearly 50% month-on-month, contributing to the main increase. Traditional electromagnetic wires remained flat month-on-month.

Shipments maintain expectations of 2,000 tons

The company is actively laying out production bases, benefiting from the boom in demand for electric vehicles. It is expected that Q3 will ship 500 tons of flat electric vehicle cables, and the annual shipment volume may reach 2,000 tons.

Net profit for 21-23 is estimated to be 350, 5.5, and 80 million yuan, corresponding to 16, 10, and 7 times PE.

Risk Reminder

Demand for new energy vehicles fell short of expectations, and raw material prices rose sharply.