Event: when Dazu Laser released its quarterly report for 2022, 2022Q1-Q3 achieved operating income of 10.562 billion yuan, down 11.47% from the same period last year; realized net profit of 1.014 billion yuan, down 32.45% from the same period last year; and deducted 818 million yuan from non-home net profit, down 35.45% from the same period last year. 2022Q3 achieved revenue of 3.625 billion yuan in a single quarter, down 18.43% from the same period last year; net profit from home was 382 million yuan, down 37.58% from the same period last year; and net profit from non-return was 211 million yuan, up 57.64% from the same period last year.

High-power laser equipment and consumer electronics-related business are under short-term pressure, and new energy equipment keeps growing at a high speed.

Affected by the epidemic, macroeconomic recession, logistics and other factors, the company's downstream customer equipment investment demand has been greatly suppressed, resulting in the company's revenue in the first three quarters fell 11.47% compared with the same period last year. Sub-business point of view: 1) High-power laser processing equipment: it is closely related to GM's equipment business and macro-economy, and it is estimated that this part of the business is a significant drag on revenue. Special areas such as laser welding equipment for new energy vehicles are expected to benefit from the accelerated penetration of new energy vehicles, the company's business is expected to continue the high growth rate in the first half of the year. 2) Consumer electronics related business: the consumer electronics industry is declining, and the revenue of the special equipment business in the consumer electronics PCB industry is expected to decline. 3) New energy equipment: the company's cooperation with Ningde Times and other leading customers continues to deepen, and the market share increases steadily. In the context of accelerated production expansion of lithium power, it is estimated that the business will still maintain a high growth rate.

During the period, the expense rate and large impairment losses lead to the decline of the company's profitability. 2022Q1-Q3, the company's net profit rate on sales was 10.32%, down 2.83pct from the same period last year. Split point of view, 1) gross profit margin end: 2022Q1-Q3 gross profit margin is 36.51%, down 0.89pct from the same period last year. 2) fee rate: the expense rate during the 2022Q1-Q3 period is 26.83%, which is higher than the same period last year, which has a significant drag on the net interest rate. 3) impairment loss:

2022Q1-Q3, the company's assets-credit losses (mainly bad debts, inventory price decline, goodwill impairment provision) totaled 262 million yuan, an increase of 167 million yuan over the same period last year, which is a great drag on the company's net profit.

Investment advice: we carefully reduce the company's 2022-2024 return net profit to 14.12 RMB 18.45 / 2.247 billion and YoY-29.22%/+30.69%/+21.82%;EPS 1.34 to 1.75 RMB 2.14. Taking into account the big clan as the industry leader, the growth is resilient and sustainable, maintain the "buy" rating.

Risk tips: the proportion of actual control hostages is high, downstream demand is lower than expected, the epidemic affects delivery, new business development is not as expected, industry competition intensifies, and core technical personnel are lost.