Event: Sunrise Oriental announces its third quarterly report of 2022. From January to September in 2022, the company achieved an income of 2.7 billion yuan, YoY-5.5%; achieved a performance of 10 million yuan, YoY-77.2%. Converted to 2022Q3 realized income of 960 million yuan in a single quarter, YoY-4.5%; realized performance of 40 million yuan, YoY+37.9%. The company's exchange earnings have increased, costs have fallen, and Q3 performance has grown rapidly. Considering the volume of overseas air energy products, we have positive expectations for the future operation of the company.
Affected by real estate, the company's Q3 revenue declined: due to the impact of real estate, kitchen and bathroom products sales pressure, Q3 company revenue declined in a single quarter. From a business point of view, Q3 Sunrise Oriental Air Energy business volume, revenue growth faster than the company's overall sales performance. According to customs data, China's air energy heat pump export increased by nearly 60% from July to August 2022 compared with the same period last year. In the short term, higher natural gas prices also have a pulling effect on air energy heat pump sales, but we believe that overseas environmental protection policies and subsidies are the longer-term driving force for the development of the industry.
Looking to the future, if the air energy industry continues to grow, the scale effect leads to a decline in equipment prices, and consumers will buy air energy products even without subsidies, then the industry will enter a stage of spontaneous virtuous cycle.
With the arrival of the Q4 export season, we expect Sunrise Eastern Air Energy business to perform better and the revenue side is expected to improve.
Q3 company profit improvement: Sunrise Oriental Q3 net interest rate compared with the same period last year + 1.0pct, we believe that the main reasons are: 1) the impact of the epidemic gradually fades, the company production resumes, and the scale effect appears. At the same time, cost pressure is also decreasing. Sunrise Oriental Q3 gross profit margin year-on-year + 1.8pct. 2) the company benefits from the depreciation of RMB against the US dollar and an increase in exchange gains. 3) low base in the same period last year.
Investment suggestion: we expect the solar water heater and kitchen electricity business of Sunrise East to develop steadily and the air energy business to grow at a high speed. We expect the company's EPS to be 0.22 pound 0.27 yuan in 2022-2023, maintaining a buy-An investment rating.
Risk hint: the RMB appreciates sharply and the price of raw materials rises.
