Key points of investment
The company released its report for the third quarter of 2022: revenue of 519 million yuan, an increase of 72.80% over the previous year; net profit of the mother was 320 million yuan, an increase of 120.84% over the previous year; net profit of 296 million yuan after deduction, an increase of 118.47% over the previous year; basic earnings per share were 0.75 yuan/share, up 108.33% year on year.
On a quarterly basis, the company achieved revenue of 1.73, 1.42, and 204 million yuan respectively in 2022 Q1, Q2, and Q3, respectively, with year-on-year changes of +135.91%, +11.22%, and +105.55%, respectively. Q3 revenue increased 43.56% month-on-month; Q1, Q2, and Q3 achieved net profit of 0.91, 0.94, and 136 million yuan respectively, up +183.83%, +51.76%, +165.11%, respectively. Q3's net profit increased 44.36% month-on-month.
In the first three quarters of 2022, the company's overall gross margin was 74.27%, a year-on-year decrease of 4.43 pct. Among them, the Q3 gross profit margin was 77.97%, a year-on-year decrease of 0.31 pct, an increase of 2.90 pct over the previous year; the net interest rate for Q3 was 61.69%, an increase of 13.42 pct over the previous year, of which the Q3 net interest rate was 66.44%, an increase of 14.94 pct over the previous year and an increase of 0.38 pct over the previous year.
In the first three quarters of 2022, the company's expenses during the period totaled 40 million yuan, a year-on-year decrease of 51.86%, accounting for 7.61% of the company's revenue, and the share of revenue decreased 19.72 pct year-on-year.
By the end of the third quarter of 2022, the company's accounts receivable were 648 million yuan, an increase of 183.68% over the beginning of the year. The accounts receivable turnover rate was 1.19 times, a decrease of 0.01 times over the previous year; the company's inventory was 34 million yuan, an increase of 22.99% over the beginning of the year, and the inventory turnover rate was 4.39 times, an increase of 2.13 times over the previous year.
The company closely focuses on the two core tasks of production assurance and the construction of the third phase of the project. The construction of the third phase of the civil engineering project has been completed 95%, and the equipment order contract signing rate has exceeded 95%. Operating income and net profit for the first three quarters of 2022 reached 74.17% and 74.01% of the target values of the incentive plan company-level assessment, respectively. Since 2022, the company has had plenty of on-hand orders and has been in a state of “rapid production and full sales”. Therefore, the company's operating performance for each quarter of 2022 mainly depends on the company's production and delivery capacity within a single quarter. In the fourth quarter of 2022, the company still faced greater delivery pressure due to the need for optimized commissioning of the kiloton line.
We maintain our profit forecast. It is estimated that the company's net profit for 2022-2024 will be 4.50/7.19/909 million yuan respectively, and EPS will be 1.02/1.64/2.07 yuan/share respectively. The corresponding PE closing price on October 28 will be 53.3/33.3/26.4 times, maintaining the “prudent increase” rating.
Risk warning: Product delivery progress falls short of expectations, new product development falls short of expectations, and industry competition intensifies.