Event: on October 27, the company released its third quarterly report of 2022. In the first three quarters of 2022, the company achieved 1.685 billion yuan in revenue, an increase of 29.39% over the same period last year, and a net profit loss of 10 million yuan, narrowed by 54.74% over the same period last year, with a gross profit margin of 12.25%, which increased 1.92pct over the same period last year.
Revenue grew rapidly in the third quarter of 2022, with a significant improvement in performance compared with the previous quarter. In the single quarter of Q3 in 2022, the company achieved revenue of 615 million yuan, an increase of 45.37% over the same period last year, an increase of 23.45% over the previous year, and a net profit loss of 2.69 million yuan, 9.75% lower than the same period last year and 79.77% lower than the previous quarter; realized a comprehensive gross profit margin of 13.93%, an increase of 6.96pct and a month-on-month increase of 1.59pct. The main factor for the company's rapid revenue growth is the rapid release of supporting models. Wuling Hongguang MINI EV/ XPeng Inc. P7 / NIO Inc. ET7 sales increased by 12.58 / 6.27 / 39.97% respectively in the third quarter compared with the previous quarter (data source: traffic insurance) The main factor for the increase in gross profit margin is the improvement of product structure. The company's motor supporting models have expanded from A00-class models such as Wuling Hongguang MINI to B-class cars such as NIO Inc. ET7 and XPeng Inc. P7, with an increase in the proportion of high value-added products.
The scale effect drives the expense rate down. In the single quarter of Q3 in 2022, the company's sales / management / R & D / financial expenses accounted for 0.96 / 5.45 / 8.61 / 0.31% of total revenue respectively, a decrease of 2.89 / 3.62 / 2.27/-0.06pct and 0.01 / 1.37 / 0.56 /-1.2pct compared with the same period last year. The net interest rate was-0.73%, an increase of 7.4pct and an increase of 2.03pct. The rate of sales, management and R & D expenses of the company has gradually declined, and the scale effect has been gradually reflected.
The profitability is gradually improved, and the high growth is expected in the future. We believe that in the future, the company is expected to maintain rapid revenue growth and achieve a turnaround, the main driving factors include: 1) the new project is gradually entering mass production. The mass production projects of the company's downstream customers this year and next include NIO Inc. ET7/ET5/ES7, EC6/ES6/ES8 modified model, XPeng Inc. P7 modified / G9, honeycomb electric drive, SAIC and Wuling hybrid models, etc., as this part of the new project gradually enters the mass production climbing stage. The company's revenue is expected to continue to grow. 2) with the gradual improvement of profitability, on the one hand, the product structure of the company's new projects is better, the value of bicycles is higher, and the profitability is stronger; on the other hand, there is room for optimization of stock businesses such as Wuling Hongguang MINI EV, and profitability is expected to be improved.
Investment suggestion: from 2022 to 2024, we expect the company to achieve operating income of 25.0 million RMB 43.7 / 7.43 billion, net profit of 0.2pm 1.6 billion RMB, current share price corresponding to PE 23.4 USD 12.6 times, maintain the "buy-A" rating and maintain the target price of 11.5 yuan per share for 6 months.
Risk tips: the impact of lack of core in the automotive industry, the risk that the sales of new energy cars are less than expected, and the risk of raw material price fluctuations.
