Event: on October 24, 2022, the company released the "third quarter report of 2022". The company achieved operating income of 710 million yuan in the first three quarters, down 5.87% from the same period last year, and its net profit was 40 million yuan, down 53.02% from the same period last year. The net profit after deducting non-return was 33 million yuan, down 56.82% from the same period last year.
Results fell in the third quarter and profitability gradually recovered in September. The company's income in the third quarter was 235 million yuan, down 6.76% from the same period last year, and the net profit was 10 million yuan, down 55.13% from the same period last year. The net profit was 6 million yuan after deduction, down 72.62% from the same period last year. In the third quarter, the company's gross profit margin was 9.27%, and the net profit rate was 4.42%, down 15.89pct and 4.78 pct respectively from the same period last year, and 12.19pct and 2.89pct from the previous month. The company's revenue declined in the third quarter compared with the same period last year, mainly affected by the prosperity of the industry. The company's gross margin and net profit margin declined, mainly due to the strong impact of high temperatures in July and August, which affected the company's profitability as a whole. The company's profit level returned to normal in September and is expected to recover significantly in the fourth quarter. The company's fixed assets in the third quarter were 669 million yuan, unchanged from the previous quarter, an increase of 14.3% over the same period last year, and projects under construction were 20 million yuan, down 57% from the same period last year, mainly due to the consolidation of some projects under construction in the third quarter.
Wind power rollers, high-speed rail rollers, new energy vehicle bearing rollers and other high-end products are gradually promoted, and the company's long-term development is improving. As a leading manufacturer of wind power rollers and steel balls in China, the company has obtained batch orders from domestic and foreign customers such as Dalian SKF, New Power Alliance, Fersa (Fosai), Lauragong, Hengrun shares, and signed a strategic partnership agreement with New Power Alliance, which has obvious leading advantages. The company's production capacity continues to expand and can maintain rapid growth in the future. The company's high-speed rail bearing rollers are undergoing road test verification, which is expected to achieve domestic substitution, and the competition pattern is good; the company has the manufacturing capacity of new energy automobile hub steel balls, and has supporting core new energy vehicle brands such as Tesla, Inc. and NIO Inc.. With the release of the company's production capacity and the rapid growth of new energy vehicles, the company's wheel steel balls will achieve rapid growth.
Ceramic rollers will expand rapidly in the new energy vehicle industry, and the company is expected to maintain a leading position. The driving motor of the new energy vehicle has a high speed, and the phenomenon of "electric corrosion" may occur under the high-voltage platform, which seriously affects the life and safety of the vehicle. Ceramic ball bearings can effectively solve the defects of traditional bearings, such as poor high-speed performance and electrical conductivity, and are expected to be widely used in new energy vehicles. Lixing Co., Ltd. is the world's leading manufacturer of bearing rolling system, and has a good cooperative relationship with Skyver and other industry leaders. At present, the products are being tested, and the company's ceramic rolling business is expected to grow rapidly.
Profit forecast and investment rating: the company has the world's leading manufacturing capacity, huge room for domestic replacement of bearing rollers, high prosperity in wind power industry, new energy vehicles and other industries, we expect the company to maintain good growth in the future. It is expected that the company will achieve a net profit of 0.8 billion yuan in 2022 to 2024, corresponding to the PE of 40-18-13, which will be rated as "overweight".
Risk tips: macroeconomic downside risks; high-speed rail roller verification is not as expected; ceramic ball bearings infiltration speed is not as expected.
