Event: the company announced that 2022Q3 achieved 830 million yuan in revenue in a single quarter, an increase of 77% over the same period last year, and a net profit of 23 million yuan, down 45% from the same period last year.
Comments:
The delivery of castings may be lower than expected. 2022 is the first year after the end of sea breeze rush installation, the bidding volume and prices have declined. The company's offshore wind power business accounts for a relatively high share of revenue, and we believe that the delivery of castings may be lower than expected, so Q3 revenue fell 9% month-on-quarter, and inventory also increased. In addition, the price of gear steel also fell 16% month-on-month due to the overall downward drag, which may also have an impact on the company's traditional business.
The cost of R & D has increased significantly, which is a drag on performance. The cost of the company increased during the Q3 period, of which the R & D cost increased significantly to 60 million yuan, an increase of 86% compared with the previous month, due to the company's increased investment in energy equipment parts and special steel new materials. In addition, increasing customer expansion has also led to an increase in sales and management costs.
The contribution of Deyang plate is less than expected. The net income of the company's Q3 investment has dropped to zero, and we believe that due to the epidemic and many other factors, the contribution of Deyang plate may not be as expected.
Costs and profits are expected to be further realized. The company's raw materials are pig iron and scrap prices continue to decline, and the company's Q3 gross profit margin increased slightly compared with the previous quarter. We believe that the company's special steel products are positioned at a higher end, the price toughness is strong, and the price gap between purchase and sale is expected to widen.
The core components of wind power gearbox open the second curve of performance growth: wind power bidding forces the whole machine manufacturers to reduce costs and promote large-scale wind power. The permeability of doubly fed and semi-direct drive technology with gearbox is increasing in large fans and offshore fans. Large fans need to be equipped with high torque density gearbox, which currently depends on imports; high-end gearbox core parts-large precision wind power gears have high production technology and capital barriers, and there is no large-scale production line in China. Aiming at the gap in the domestic high-precision large-scale wind power gear market, the company takes the lead in introducing foreign advanced intelligent production equipment. The production line is expected to be completed in 2023 and reach production in 2024, when it will contribute 485 million yuan in net profit per year.
Profit forecast and investment rating: we maintain the company's income for 2022-2024 at 35x46 / 6.2 billion yuan respectively, with a growth rate of 28% 32% and 34% respectively. Based on the company's Q3 performance, we reduced the company's 2022-2024 net profit from 2.2 million to 130 million, with a corresponding growth rate of-24%, 199%, 75% and 51x/17x/10x, respectively. Considering the continuous progress of the company's gearbox project, the cost is expected to further benefit, the company has high medium-and long-term growth and low valuation, so it maintains the company's "buy" rating.
Risk tips: raw material price fluctuations; wind power industry policy is not as expected; the company's production expansion speed is not as expected.