Introduction to this report:
The company's 2022 Q3 performance fell short of expectations. The short term was mainly affected by control policies such as the epidemic, but long-term growth was unworrisome.
The profit forecast was lowered to a “prudent increase in holdings” rating, and the target price was maintained at 39.75 yuan.
Key points of investment:
It was downgraded to a “prudent increase in holdings” rating. Due to the short-term impact of the epidemic. We lowered the 2022-2024 EPS to 1.04/1.44/1.89 yuan respectively (the original EPS was 1.12/1.59/2.36, respectively), the growth rate was 37%/39%/31% respectively, and the maintenance target price was 39.75 yuan (corresponding to 27.6 times PE in 2023).
22Q3 was affected by the epidemic and fell short of expectations. In the third quarter, the company achieved operating income of 80 million yuan, -27.48% year on year, -46.67% month on month, and achieved net profit of 11 million yuan to the mother, -64.76% year on year and -71.43% month on month. The epidemic control in Dalian was further upgraded in the third quarter, and the company's deliveries were affected. The company's 22Q3 gross margin was 35.98%, -6.88 pct month-on-month, net interest rate 13.55%, -14.58 pct month-on-month, mainly due to declining sales volume and increased cost amortization.
The company's inventory has risen further, and attention is being paid to post-pandemic recovery. By the end of the third quarter, the company's inventory was 365 million yuan, an increase of 97 million yuan over the beginning of the year. The company cooperates closely with chemical companies such as BASF. Under the European energy crisis, order transfers will become a long-term trend, focusing on order recovery.
The incentive plan covers the company's core personnel and enhances team cohesion. The company issued a stock option incentive plan. The number of stock options to be granted is 8 million, accounting for about 4.54% of the share capital. The price for the exercise is 31.80 yuan/copy. The incentive targets are mainly 51 directors, senior management, core technical personnel and core business executives. Based on 100% exercise of authority at the company level, the company's net profit attributable to the parent in 2022-2024 should be 174/228/335 million yuan respectively, or the cumulative net profit attributable to the mother in 22-23 was 402 million yuan, and the cumulative net profit attributable to the mother in 22-24 was 737 million yuan.
Risk warning: Product demand falls short of expectations, and raw material prices have risen sharply
