Event: On October 25, 2022, the company released the “Report for the Third Quarter of 2022”. The company achieved operating income of 2.7 billion yuan in the first three quarters, an increase of 4.90% over the previous year, net profit of 330 million yuan, an increase of 43.64% over the previous year, net profit after deducting 313 million yuan, an increase of 41.58% over the previous year.
Performance continued to grow, and profitability continued to improve: the company achieved revenue of 887 million yuan in the third quarter, an increase of 13.66% over the previous year, achieved net profit of 99 million yuan, an increase of 25.14% over the previous year, and achieved net profit of 94 million yuan after deducting non-return net profit of 94 million yuan, an increase of 20.99% over the previous year. The company's gross margin in the third quarter was 32.36%, up 4.50 pct year on year and 4.00 pct month on month; net margin was 11.46%, up 1.00 pct year on year, and down 2.29 pct month on month. The company's contract debt at the end of the third quarter was 369 million yuan, a year-on-year decrease of 7.98%. The company's projects under construction in the third quarter were 4,023 billion yuan, an increase of 11.50% over the previous year. The company's net cash flow from operating activities in the first three quarters was 338 million yuan. The company's domestic screw machine business has been greatly affected by the macro environment, but overseas business has increased dramatically and has remained stable overall.
Geothermal power plants are connected to the grid one after another, and geothermal resources continue to be accumulated: The company announced on October 10 that the third phase of the Indonesian SMGP project was connected to the grid, with a power generation capacity of 46.15 MW. It became the second grid-connected project in the second half of this year. The connection of the company's geothermal power plants to the grid is progressing smoothly. On October 17, the company issued an announcement. The company signed an equity subscription agreement with TTG. It plans to acquire 49% of TTG's shares and obtain corresponding geothermal power generation resources.
Profit forecast and investment rating: The company is a leading domestic screw air compressor company and is gradually entering the high-end compressor market. Overseas business is developing rapidly, and it has leading technical advantages in the field of geothermal power generation. We expect the company to achieve net profit of 4.6/67/890 million yuan from 2022-2024. The corresponding PE was 38/26/19 times, respectively, and a “increase in weight” rating was given.
Risk warning: Geothermal power plants connected to the grid fell short of expectations; domestic manufacturing recovery fell short of expectations; overseas market expansion fell short of expectations
