Core ideas:

Yinghe Technology released its quarterly report for 22 years. In the first three quarters of 22, the company achieved revenue of 6.613 billion yuan, an increase of 105.48 percent over the same period last year, and a net profit of 353 million yuan, an increase of 109.65 percent over the same period last year. Q3 realized revenue of 1.989 billion yuan, an increase of 34.21 percent over the same period last year, and net profit of 89 million yuan, an increase of 36.79 percent over the same period last year.

Reduce cost and increase efficiency to deal with cost pressure. In the first three quarters of 22 years, the company's gross profit margin was 19.54%, down 3.26pct from the same period last year, and the net profit rate was 5.45%, up 0.5 PCT from the same period last year; Q3 single-quarter gross profit margin was 19.93%, down 0.85pct from the same period last year, and the net profit rate was 4.69%, increasing 0.74pct over the same period last year.

Due to the rising prices of raw materials and labor costs, the gross margin of products is under pressure. In the past 22 years, the company has promoted "reducing costs and increasing efficiency". By strengthening the cost control of the overall production process, the company has further improved operational efficiency, and the net interest rate has remained basically stable compared with the same period last year.

The demand for new energy equipment has increased, and breakthroughs have been made in overseas markets. As of the end of Q3, the company's contract assets were 1.145 billion yuan, an increase of 130.15% over the same period last year, and accounts receivable were 4.306 billion yuan, an increase of 85.28% over the same period last year, reflecting the expansion of orders-on-hand. The order growth is mainly driven by the demand for new energy equipment, and the company gains more orders by virtue of product performance advantages and the blessing of Shanghai electric resources. According to the semi-annual report, the company's newly signed orders maintain a good momentum of development, and continue to make breakthroughs in overseas markets, winning overseas market orders from Volkswagen and ACC. In addition, the company's capacity expansion is advancing steadily, and the delivery capacity continues to improve.

Profit forecast and investment advice: it is estimated that the 22-24 year net profit of the company will be 5.8718.98 / 1.286 billion yuan respectively. Considering the order and growth of the company, we value the 22-year return net profit of the company at 35x PE, corresponding to a reasonable value of 31.64yuan per share, and maintain the "buy" rating.

Risk tips: downstream power battery industry competition intensifies and raw material price rise transmission risk, accounts receivable bad debt risk, company management risk.