Event: the company released its third-quarter results report on October 15. Q1-Q3 achieved operating income of 1.072 billion yuan, + 0.7% year-on-year, and net profit of 166 million yuan, compared with-5.5% of the same period last year. The net profit of Q3 was 360 million yuan, + 7.5%, and 48 million yuan, + 4.0%, respectively.
Comments:
The prosperity of the automobile industry rebounded, and the performance of Q3 was good. The company's Q3 realized operating income of 360 million yuan, + 7.5% year-on-year, + 19% month-on-month, and net profit of 48 million yuan, + 4.0% and + 33%, respectively. In the first half of the year, affected by many factors, such as the poor macroeconomic environment, the disturbance of the epidemic situation, and the low prosperity of the automobile industry, the performance of the automobile sector was greatly under pressure, including passenger vehicle revenue + 1% year-on-year and commercial vehicle revenue-49% year-on-year. With the gradual improvement of the macro-economy, the impact of the epidemic has been effectively alleviated, the policy has promoted a high increase in car sales compared with the same period last year, and the company's Q3 performance has been good.
The high growth of aerospace business has boosted the company's overall performance. In August 2020 and September 2021, the company acquired 68.9% and 31.1% shares in Chengdu Haoyiqiang Aviation equipment Manufacturing Co., Ltd., and cut into the field of aviation high-end equipment manufacturing with large market space and high profitability. In 2022, H1 Hao Yiqiang Company achieved operating income of 122 million yuan, year-on-year + 67.6%, net profit of 61 million yuan, + 89.8% year-on-year, accounting for 17.1% of the company's revenue. Looking to the future, aviation business orders are abundant and are expected to continue to maintain high growth; the aerospace business is expected to continue to benefit from the historic opportunity of commercialization, and the company expects to gradually form production capacity this year. At present, close ties have been established with some commercial aerospace leading enterprises, and some projects are in the pilot and production stage.
Capitalized operation strengthens the automotive business and lays the foundation for the company's performance growth. In September 2022, the company's application for convertible bonds was examined and approved by the Securities Regulatory Commission, and it is proposed to raise 500 million yuan for the first phase of the automobile differential assembly production base project and supplement liquidity. The first phase of the differential project plans to invest 1.06 billion yuan, of which 350 million yuan comes from raising funds. The project plans to build an annual production base of 5 million sets of automobile differential products in 2025. In addition, the company plans to form an annual production capacity of 10 million sets of differential assemblies in 2030. In October 2022, the company issued an announcement to increase the capital of Luzhou Hao Neng subsidiary by 250 million yuan in the form of debt-to-equity swap. this capital increase will help to optimize its asset-liability structure and further promote the development of automobile business.
Profit forecast and investment rating: we are optimistic about the growth potential of the company's automobile + aerospace industry. The company's 2022-2024 net profit is expected to be 2.61,3.43 and 431 million yuan, corresponding to PE of 18,14,11 times respectively.
Risk factors: raw material price fluctuations, capacity release is not as expected, customer development is not as expected, epidemic relief is not as expected.